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Natural Gas & Crude Oil

ChartWorks:: published by Institutional Advisors
Bob Hoye
June 20, 2007
Technical observations of

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. $12.55+).

As can be seen on the following chart from Moore Research (, 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.

June 20, 2007

The opinions in this report are solely those of the author. The information herein was obtained from various sources; however we do not guarantee its accuracy or completeness. This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Neither the information nor any opinion expressed constitutes an offer to buy or sell any securities or options or futures contracts. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. In addition, investors in securities such as ADRs, whose values are influenced by the currency of the underlying security, effectively assume currency risk.

Moreover, from time to time, members of the Institutional Advisors team may be long or short positions discussed in our publications

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