If the price of gold doubled, gold stocks would fly away. The same is true for most commodities and their producers. But natural gas has doubled since last year, and the reaction in the stocks has been comparatively mild. The stocks of producers are up nicely, but they still don t reflect the coming gains in cash flow and the increased value of reserves. There are several reasons.
Most investors are still focused elsewhere.
We don t think that is going to happen again. But even if it did, the effect on gas prices would be marginal. We have to produce our needs at home, and we are not producing enough. We ve been bullish on natural gas for some time, and have talked about the demand picture. But at this point the supply side of the equation is more important.