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Gaming A Commodities Comeback


After a rough period, could certain commodities be staging a comeback?

Some of the energy sector's heaviest hitters will meet in Houston this week at an annual conference organized by Cambridge Energy Research Associates, a consultancy chaired by economic researcher Daniel Yergin.

The five-day conference, which begins Monday, comes only a week after many oil and gas companies reported their worst quarterly earnings in years, dragged down by crude's 60 percent price drop in the final three months of 2008.

Oil continues to hover near five-year lows around $40 a barrel.

So far, the world's biggest oil companies aren't scaling back spending on new oil and gas projects, but any curtailment of production could cause supply problems once the world's economies start to rebound.

Amid the turmoil Fast Money trader Tim Seymour sees opportunity. "Keep an eye on the main players in nat gas," he says on CNBC’s Closing Bell. “They’ve dramatically cut production as well as their capex.”

For a trade Seymour likes XTO, Devon and/or Apache.

“They've taken nat gas production out of the market and you’re seeing major switching from coal to nat gas." (In other words, supply has diminished and Seymour anticipates increased demand.) "Any kick up in demand should trickle straight to these guys.”

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