The most important thing is to wait, and we are qualified to wait.
~Francsico García Paramés
Natural gas is approaching a 30 year base.
It is now cheaper than it was in 1980. There are not many things now that are cheaper than they were 40 years ago. Everyone knows the story of natural gas. It is cheap and plentiful. When everyone knows something that is when opportunity arrives. The opportunity to do the exact opposite. This is why my favorite investment book is “Extraordinary Popular Delusions and the Madness of Crowds“. It is the only book you need to read if you want to become rich.
The futures market is highly leveraged. It is not for everyone. For every $1 move in natural gas, you get a profit or loss of $10,000.
Having said that, the largest surge in gas production in percentage terms (as far as I know) has made an interesting futures curve.
Gas production is at a record high. But so is demand. The expansion of the northeastern pipeline systems has made everyone believe that the natural gas supply is infinite. This has pushed down the price for gas way out into the future. I am not saying natural gas is about to start a bull market and go to $14 in the near future. I am saying that there is a good chance that between now and the year 2022, one of the worlds most volatile commodities has a possibility of being $3.4 per MMBTU. For every contract you buy, that means a $10K profit.
When you think low risk high reward, think natural gas.