Natural Gas & Crude Oil
ChartWorks:: published by Institutional Advisors
June 20, 2007
Technical observations of RossClark@shaw.ca
Natural gas inventories are building at a normal pace since April. Prices were anticipated to have their
normal peak in April followed by a test of the $6 level as we move into a July low.
Because last year recorded a multi-year top in inventories and prices were unsurprisingly depressed (similar to
1995, ’98, ’01 & ’04) we can anticipate that prices in the second half of this year will have an excellent chance
of exceeding last winter’s high of $9.05. Based upon the previous examples it should be by more than 25% (i.e.
As can be seen on the following chart from Moore Research (www.mrci.com), we are within a week of
where prices have a seasonal tendency to stage a one month decline, providing an optimum buying
opportunity next month.
Stocks in the group are influenced by the prices of natural gas, crude oil and the equity markets. The
following chart shows our composite model for the Natural Gas Index (XNG). For now the XNG is
perfectly in line with the model.
BOB HOYE, INSTITUTIONAL ADVISORS
June 20, 2007
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