"The smart money(Wilbur Ross, Jeff Gundlach, Third Ave Value Fund-Marty Whitman,etc.) is in buying natural gas assets with gas <$2.00mcf. Gundlach's presentation yesterday likened Nat Gas in 2012 to Gold in 1997. Rather than calling it a "game changer" because of fracking technology, with gas prices in the U.S. at 20% of the world price, and the possibility of exporting LNG increasing, are you still "spoilt for choice" with all the other commodity opportunities, or is it on your radar and you choose not to focus on it until after it has based?

"p.s. I almost forgot. No less an authority than T.Boone Pickens was out touting Natural Gas - he does have a vested interest, but his timing appears to be no accident."

David Fuller's view Thanks for your email on an important subject and I am sure that many in the Collective would be interested in seeing Jeff Gundlach's presentation, if it is available.

After crude oil, natural gas is the most important commodity by far, and preferable to the former in a number of instances.

Is natural gas in 2012 like gold in 1997? My answer is a qualified yes, to the extent that it is a very cheap commodity which will not stay below $2 indefinitely. I am not sure why Gundlach chose 1997 as his reference point for gold but the precious metal was still on its way down did not bottom until 2H 1999 or commence a sustainable recovery until 2001.

Natural gas has been and remains a 'game changer' for the US economy but not necessarily natural gas producers, as we know. There is a supply problem because they overbid for properties on which to drill, had to go ahead because of 5-year contracts, and production has overwhelmed inadequate storage supply. Moreover, having not anticipated the boom, the US has 9 terminals to receive LNG imports, mostly sitting idle, but none to convert to LNG for exports. The US is still waiting for the first converted conversion to a LNG export terminal. Meanwhile, many drillers have moved on to shale oil and are flaring off the gas by-product, which is a sad waste of an important resource.

Anyone who bought US natural gas futures (weekly & daily) in hope of a medium-term recovery has wound up being crucified by the contango over the last 15 months and counting. Natural gas will certainly stay on our radar but it remains very difficult to make money from the next recovery before it has actually commenced, or at least shown some climactic action. Currently, it just looks oversold but is still drifting lower.