A ) Natural Gas and Oil Drive Higher - and Drive The AMP Portfolio
( personally , I never tire of that headline)
Natural gas advanced as crude oil surged to a record and the euro climbed against the U.S. dollar.
Oil touched $126.25 a barrel, the highest since futures began trading
in 1983. The 15-nation currency versus the dollar today extended its
gain from an eight-week low. Returns from investing in commodities have
surged this year, led by natural gas, as investors sought alternatives
to stocks.
``The natural gas move is 100 percent crude-price related,''
said Peter Linder, an analyst and senior adviser with Calgary- based
DeltaOne Energy Fund. The fundamentals for gas are also ``very strong''
amid an outlook for reduced supplies. Natural gas for June delivery
rose 27.4 cents, or 2.4 percent, to settle at $11.537 per million
British thermal units at 3:05 p.m. on the New York Mercantile Exchange.
It earlier rose to $11.569, the highest price since $11.88 on Dec. 29,
2005. Gas has gained 54 percent so far this year.
The June through March 2009 contracts on the Nymex are in contango, a
market condition in which gas for delivery in a subsequent month
becomes more expensive than in the month before it. A steep contango
encourages traders to buy gas and store it for later sale when it's
more profitable.
Linder Increases His Nat Gas Target Prices
Linder, who in a March 5 interview with Bloomberg News forecast an
average natural gas price of $11 to $12 per million Btu this summer,
today modified his outlook to $12 to $14 because
of surging crude oil. Oil has gained 21 percent since March 5. Gas
closed at $9.741 per million Btu on March 5 and has advanced 18 percent
since then. ``The real surprise going forward is going to be gas
prices,'' said Linder. It will be moved by oil prices ``and speculative
traders.''
Crude oil for June delivery gained $2.27, or 1.8 percent, to $125.96 a
barrel in New York. Futures have advanced 31 percent so far this year
and have more than doubled in the past year.
Euro Climbs
The euro today advanced for the fourth time in five days against the
dollar, rising 0.6 percent to $1.548 at 3:43 p.m. in New York from
$1.5394 yesterday.
The dollar dropped 10 percent since Sept. 18, when the Federal Reserve
began cutting rates to ease financial-market strains and stave off a
recession. The U.S. central bank cut rates seven times while the
European Central Bank has left rates unchanged.
Oil at $200 is ``possible if we have a continuing devaluation of the
dollar with respect to other currencies,'' Organization of Petroleum
Exporting Countries President Chakib Khelil said yesterday at a press
conference in Washington.
Inventories are pointing to higher price / support
Gas inventories in the week ended May 2 increased 65 billion cubic feet
to 1.436 trillion, an Energy Department report said yesterday. Supplies
were 11 billion cubic feet below the five- year average and 17 percent
less than last year.
