With all the talk of natural gas this year it is the worst performing commodity despite some of the harshest winter we have had in a long time. As most things energy (or Greece) Speculators have driven the price down, just the opposite of the oil price action we saw a couple of years ago from speculation. Additionally the governement numbers showed an increase in supply adding to the over production and under use (more supply and less demand = lower prices) However, most analyst and refiners see a short term consolidation in price with a 2-3$ increase in the long term which is about 100% up from the $5 mark of today...
XOM jumped today, taking our Jan 11 75 options with it after the planned acquisition of XTO Energy for a small premium. From DJN today:
XTO Energy Inc. (XTO), Exxon Mobil Corporation (XOM)
Premium offered: $0.41 or 0.87%
Acquirer: XOM
Target: XTO
Shares offered per share: 0.7098 share
Value of offer per share: $47.49
Value of outstanding common equity: $27,559,864,337
Acquirer share price: $66.91
Target share price: $47.08
Expected closing: 2Q 2010 5/16/2010
Annualized gain: 6.61%
Note: Exxon's deal with XTO contains language allowing Exxon to back out of the agreement if Congress passes a law requiring stronger federal oversignt of a controversial drilling technique, called hydraulic fracturing, or "fracking", illegal or "commercially impracticable." The companies
participated in a hearing in late January about the issue and the EPA has started a study on it. Critics of the method have say fracking creates pollution, but U.S. Energy Secretary Steven Chu has also said he wouldn't
favor a ban on it.
Some Nat Gas ETF's that are near/at their 52-week lows: UNL UNG GAZ.
Happy Trading...
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