The Oil to Natural Gas ratio is still crashing. And maybe crashing is a harsh word, but I really don’t know what else to call it. If we were talking about the S&P500, it’s all you would hear about. But it’s one energy source relative to another, so it’s not sexy. But price is price right? At the end of the day, who cares what it is, as long as it’s liquid and we can trade it.
This particular pair was one that we discussed ad nauseum last year. Remember the good ol’ days when Oil/NatGas was up above 50:1??? At the time, people were acting like that was normal. You know, something that typically ranges around 10:1, now chilling up above 50:1. That was such a beautiful bubble that popped last year, and it’s still getting crushed.
Here is an updated chart of the pair.
I’m out in California giving a presentation and was looking through some of my favorite charts. And this one has to be up there. So I was wondering why I hadn’t posted any updates on this lately. Here it is. Looks to me like it’s still going lower. Crude Oil seems to be on the verge of a breakdown while Natural Gas keeps on trucking to new highs. So the absolutes make sense. But the pair….the pair is the one. That historic mean down near 10 is calling my name. Can you hear it?
Tags: $NG_F $UNG $CL_F $USO