Is a bottom forming for natural gas?

摘要

A contrarian investor is of the mind that profits are to be had by exploiting the flaws inherent in crowd behaviour. As the mantra suggests, investors should "buy when there's blood in the streets,"-a strategy which has proven to bear fruit over time.Currently, a quick survey of the investment spectrum shows that few sectors have exhibited as much bloodshed as natural gas in recent times. Investors with natural gas exposure have certainly had an interesting ride over the past few years. After a virtual supply drought pushed prices to $15 per thousand cubic feet in mid-2008, a surge in production in the United States has the market awash in the fuel. In turn, natural gas prices have plummeted recently as seen in Chart 1. Large independent producers like Encana Corporation and Chesapeake Energy Inc. have not been immune either, with their respective equity values falling over 40 per cent in the past 12 months.