Congrats to ic4x on the dividend call. I'll stay away from that area of expertise. I did make the call the announcement date would be Friday and to buy ahead of the announcement and prior to winter. It turns out winter is coming early in Europe, which was a big reason energy prices jumped today. I also think the weak dollar will support US natural gas prices
since a weak dollar is benefical to exports, especially in the chemical industry, so industrial use will remain strong.
Be careful, the principal reasons for today's energy sector run-up (including SJT) was the refinery outage in Venezuela and the Yukos noise.
The ensuing relief rally was looking for an excuse to show itself and will likely be short-lived as weakening fundamentals continue to show themselves.
Venezeula and Yukos are transitory events, when it comes to a pure NG play like SJT, the futures market has been acting for several weeks now as if it expects heavy withdrawals from storage --- so again, IMHO, all else is interesting, but the weather will be the primary determinant in NG pricing the next 3 months.
The only weakening fundamentals appear to be the ones you are sticking to. You are beginning to sound like our old friend Finance Wiz (the wizzie), who incidentally, we haven't heard from since last May.
(I did chicken out and sell part of my holdings of SJT at 32.25).
Bigpig--- I have looked at MSSN but prefer CEO as it has the Chinese oil denand built in as well as it proximity to its market. It also has the umbrella of the Chinese Government to insolate it from any upheavals such as might be experienced in the Islamic world.
You mentioned CitiGroup (C)
as Possible Investment. Let
me see now how many Millions
written off by Citigroup for Enron
Scandal, how many Millions written
off by Citigroup for Worldcom
Scandal,how many Millions written off on
Settlement with NY Attorney General's
Office on Illegal Trading Pratices
with Investors. Wait, didn't they
just close their Japan Office because
of Illegal Trading Problems?
This Company needs a Course in
Maybe Jack Grubman could teach
that Course, right?
My previous point was that even in the face of all the new residential and commercial construction increasing demand over the past five years and continued recent nat gas production disruption from the GOM, injections are still running well above recent years and stand at record levels. Muted summer cooling degree days obviously contributed to this, but there are other underlying reasons.
Natural gas oriented drilling permits and rigs actually turning to the right are also at high levels. Not that I'm calling for US production to rise, but near-term, more gas is coming to market.
I'm not calling for a whole sale collapse of prices to the sub $3/mcf level, but I wouldn't be surprised to see spot hit in the $3.50 range by the spring/early summer 2005. If oil rolls over more attention may focus on the fat supply fundamentals with nat gas.
Caveats are a much colder than average winter or serious geopolitical events that launch crude again.
This is a short-term call on nat gas. Long-term, it's still a great place to be, just not in these trusts at these valuation levels. The risk/reward just isn't there anymore in my opinion.
Gunga, you said...
"It seems more like a high-risk annuity than an investment at these levels, therefore why buy or hold."
The simple answer by the likes of me, a non-expert in energy/gas, is, of course, what are you buying with that money? I would suggest in that context, SJT is hardly so risky.
I wouldn't be too worried about LNG terminals in California. This is the home of millions of eco nuts who wouldn't stand for it. If they could be overcome there would probably be enough domestic production available in CA that imports wouldn't be needed anyway.
Good idea, I'll share your idea with them for next year.
One's a law professor and not very savvy about energy or financial strategy.
The others live in Boston and NYC and don't have a choice in the matter, they just pay their share at their building.