Investing Daily

BP's (NYSE: BP) mess in the Gulf of Mexico likely scuttles plans to expand US offshore drilling. The long-term picture, however, includes lots of rigs extracting fossil fuels under water.

The actual value of natural gas produced from some of the most important US shale gas fields is currently running at over $7 per thousand cubic feet.

Although renewable energies have a certain cachet as high-tech solutions to the world's energy problems, they're also impractical in the near term. That augurs well for natural gas.

That Alberta oil and gas producers could be looking at more favorable royalty structures is, obviously, a positive; every little bit that helps the bottom line counts. However, at this point the folks who have to manage these companies would settle for predictability.

Rising exports to the US accounted for three-quarters of the increase despite the relative strength of the loonie versus the greenback.

Almost half the analysts canvassed in a Bloomberg survey this week stated they expect prices to rise as the winter wears on. A slightly higher percentage, however, expressed a decidedly bearish opinion.

Although natural gas prices recently hit a seven-year low on the spot market, the action in longer-dated futures and gas-related stocks suggests that a marked improvement is around the corner.

Alternative energy companies are probably getting the most attention as potential beneficiaries of HR 2454; after all, the use of these technologies would be mandated by the RES, and putting a price on carbon tends to make energy sources that don’t emit carbon more attractive. But don’t go overboard; the bill isn’t a legitimate reason to aggressively buy alternative energy stocks.

There are glimmers of light at the end of the proverbial tunnel; some markets appear to be stabilizing. This is broadly consistent with my view of the global economy. The US economy is still shrinking, but the rate of decline has stabilized, and the recession should end by the latter half of 2009 or early 2010. Meanwhile, growth in select emerging markets appears to have reaccelerated.

A single sentence in President Obama’s proposed fiscal year 2010 budget could have significant short-term implications for domestic oil and gas production and may hold the key to understanding the new administration’s long-term energy goals.

CE Portfolio holdings ARC Energy Trust (TSX: AET-U, OTC: AETUF) and Advantage Energy Income Fund (TSX: AVN-U, NYSE: AAV) each have taken extraordinary steps in recent months to make sure they have sufficient cash right now to invest for the future. Much of that future, for both companies, is focused on the Montney Shale Formation.

Despite the steady drumbeat of bad news on the economy and oil and natural gas demand, I’m turning more bullish on energy commodities and related stocks. In fact, I’m more bullish on the sector now than I’ve been since last summer.

We’re following a simple strategy in The Energy Strategist: buying stocks in beaten-down energy subsectors with strong long-term prospects and buying defensive stocks and preferreds that offer high income potential.

The US imports more than 13.5 million barrels of crude oil each day, roughly 210 billion gallons per year. That’s equivalent to a quarter of total global trade in crude. Although America depends on imports to meet oil demand, that’s certainly not true of all energy commodities.

Most investors are aware that the US is home to the world’s largest coal reserves; in fact, the nation is increasingly becoming a key exporter of coal to Europe and Asia.

However, many are surprised to learn that the US ranks second only to Russia in natural gas production. In addition, thanks to strong growth from a handful of world-class unconventional gas fields, the US is the world’s fastest-growing producer and stands a good chance of overtaking Russia within five years.

It was a bad week for equity investors, with all three indexes posting sizable losses, though US Treasury debt saw a pop on signs that the economy continues to weaken. The S&P 500 gave up 3.1 percent in this short trading week, with the Nasdaq Composite sliding 4.7 percent and the Dow Jones Industrial Average giving up 2.8 percent. Crude oil also gave up about 8 percent for the week.

The past few weeks have brought considerable volatility to the commodity markets and related stocks. Unfortunately, periodic painful corrections aren’t uncommon in any bull market move, and the energy patch is no exception.

Just three years ago, the main topic of conversation for the North American natural gas markets was liquefied natural gas (LNG).

In-house oil and natural gas guru Elliott Gue gives us his take on the US natural gas market and how tropical activity may affect prices going forward. We’ve seen a big run up in prices in the first half of 2008, but what’s expected for the remainder of the year?

The pullback in oil, natural gas and related stocks has been dramatic over the past month and a half. But we’ve seen corrections of this magnitude before, and the recent move isn’t at all unusual from a historical perspective.

Markets north of the border are closed Tuesday in observance of Canada Day, a federal holiday marking the joining of the British colonies of Nova Scotia, New Brunswick and the Province of Canada into a federation of four provinces (the Province of Canada being divided, in the process, into Ontario and Quebec) on July 1, 1867.