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Trading Peak Oil - The trade of a lifetime?

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Is there "side trade" to the oil one above which now presents itself?


Natgas orices have corrected over the last couple of weeks after a very smooth run up from $7 to $13.5. Price has now corrected to $10.5. This puts the current gas/oil ratio at 12.4; the historical average is 6. Centirca have said today they expect gas prices to catch up with high oil prices of over the "next few years" and that UK household bills wil average £1000 pa.


I haven;t had a massive amount of time to research gas, but I have been waiting for a correction as I;m sure there is a bullish medium to long term play here. If oil fell to $100 gas by rights should catch up to $18. If oil then launches again to say $200 with 24 months gas should be $33 based on long term ratios!


The March 2010 contract right now is priced at $11.23, but admittedly it will cost you in margin to enter and maintain this trade. At 10000 mbtu's per contract thats $10000 margin for every $ move in the price (to put it simply). The upside of course is $10000 for every $ og growth in the price....

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