RE:RE:RAFI thinks gas at 7 year high not the place to be What I got from Rafi's video is that he thinks oil is going to $100, when he does not see much upside with natural gas. He might be right. However, I am not selling CR to buy ATH.
At the end of the day, oil stocks and natural gas stocks will generate a ton of free cash flows. With many names with EV/FCF below 4, we do not need oil at $100 or natural gas at $7 to make ton of money.
Oldnagger wrote:
I think that comparing nat gas pricing to oil pricing would be an effort worthy of our greatest scholars. They are both combustible hydrocarbons. So comparing them on energy eqiuivalency is easy.
Yet we all know that there is a wide discrepancy in pricing based on location and heating or cooling temperatures. Now we also have to factor in the rate and manner of renewables implementation
i.e more Ev's mean less gasoline more electricity. More wind turbines and solar mean greater reliance on nat gas or coal as a stabilizing factor. More LNG facilities directly affect nat gas demand
Also, as the world heads towards heavier crudes, more nat gas will be required not only for SAGD but also,for hydrofining the heavier crudes.
All in all I still like nat gas, but perhaps Rafi's point is that we have come too far too fast in North America at least.
With a rather mild Autumn, he is looking right so far, But I feel that investors are now cautiously looking further out than before !!
How say you guys ??