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Crosstex Energy, Komandit ┼×irket Message Board

  • novalmer novalmer May 17, 2012 2:37 PM Flag

    XTEX..The rally in natural gas tells me that

    UNG....is the nat gas ETF that's been beaten down by contango in futures, but since hitting a recent low on April of $2.00 (June contract), nat gas has rallied 31%

    The rally in natural gas tells me that electric utilities have clearly switched over, but maybe more than people think. We couldn't be sure, at least immediately, since electric utilities keep their energy source secret. However, a 31% move higher tells me that electric utilities switched a decent amount over and given the recent EPA rules that limits the amount of CO2 that can be pumped out of a plant (nat gas or coal), thermal coal plants will not be able to operate because they pump out about twice the amount allowed by the EPA.

    Therefore, a huge move like this in nat gas isn't unrealistic to me given the coal to nat gas switching, EPA rules and production cuts. Despite the run higher in nat gas, it's still 75% below its June 2008 high.

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