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Category: Investment, Natural Gas
Now is the Time to Own Natural Gas and Oil Companies If You Believe Market is going to Correct Greater than 10% and the U.S. Dollar will Fall
January 13, 2010 Edition
Energy Commentary from Karl Miller - Read Bio and More info
January 13, 2010 - For public interest, senior Energy industry executive Karl W. Miller issued the following statement, through his advisors regarding the risk of a market correction of ten percent (10%) or greater and another decline in the U.S. Dollar.
Mr. Miller has previously opined on multiple occasions that China would not be the salvation to the U.S. Economy and relying upon that rationale was a dangerous proposition for all investors.
With this in mind and the concern being touted by certain analyst that the U.S. equity market is going to correct again, Mr. Miller believes now is the time to balance that potential risk by purchasing energy commodities, primarily natural gas and oil.
If the market does correct to the downside in a substantial way, and the U.S. Dollar falls substantially, there will be a flood of additional capital into energy and other commodities for safe havens, which will only drive up the prices further.
Additionally, we are at the beginning of peak winter usage for natural gas and oil products, which provides investors a hedge on energy investments, in the event that the market does not correct and the U.S. Dollar holds firm.
Also, the natural gas market specifically is not pricing in winter demand properly and is not pricing in a normal summer peak, given the recession of 2009. The natural gas market has been lulled to sleep on price volatility, and is due for a massive correction to the upside either due to winter or summer peak usage, and what Mr. Miller believes to be fundamental flaws in estimating working gas in storage, actual deliverability of gas when required and insufficient mainline transportation.
The oil refining market has been impaired by recent closures of refinerys, and the fact that the U.S. has not built a domestic refinery in over 30 years. This makes a difference going into the summer peak usage season, and provides a further hedge for owning the oil companies.
In all scenarios, owning energy commodities and stocks makes sense right now, primarily natural gas and oil production companies.
Mr. Millers Office
Disclaimer:
This column, Energy Commentary from Karl Miller, is the opinion of Karl Miller.
Content found in the articles is subject to the terms found in the InvestorIdeas.com disclaimer and does not represent a recommendation of investment advice. Investors should seek the advice of a qualified investment professional prior to making any investment decisions.
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