Oil and Natural Gas Price Ratio Can't Last: Strategist

Monday, 24 Aug 2009 | 12:20 PM ET

Natural gas prices have been plummeting over the past few weeks to a 7-year low while oil is climbing to 2009 highs. Addison Armstrong, director of market research at Tradition Energy, and Peter Beutel, president of Cameron Hanover, discussed their outlooks.

Oil, Nat Gas: Out of Whack
Over the past two weeks, natural gas has been plummeting while oil climbs to 2009 highs. Peter Beutel, of Cameron Hanover, and Addison Armstrong, of Tradition Energy, share their insight.

“We’ve got a record amount of natural gas in storage and we’re going to hit a record for the entire season by the time we get into withdrawal season in December,” Armstrong told CNBC.

Armstrong said he sees no demand for natural gas coming soon.

“Weather forecasts are benign, and we’re going to have an Indian Summer—so even in October when we begin to see cooler temperatures, demand for natural gas for heating is going to not be as [strong],” he said.

Energy: Opinion and Data

In the meantime, Beutel said the price discrepancy between oil and natural gas do not make any sense.

“The speculators are buying oil and selling natural gas. On the one hand, we’re seeing oil going higher every time equity goes higher and the thinking is we’re going to have more demand for energy,” said Beutel.

“Something is dreadfully out of order and I don’t think it can stay like this for that much longer. But in the meantime, people are pushing it down in the natural and pushing the oil higher—it makes no sense,” he said.

More Investor Intelligence:



No immediate information was available for Beutel or his firm.

CNBC Slideshows:


CNBC's Companies in the News:

Goldman Sachs

  • Goldman's Top Clients Get Exclusive Tips: Report


  • Warner Chilcott to Buy P&G Unit for $3.1 Billion


  • Nokia to Enter PC Industry With Netbook


  • HSBC to Launch Its First ETF in Europe: Report



  Price   Change %Change