If Robry is correct, the level of natural gas production is insane. The recent completion of several pipelines has increased production by at least 1-2 bcf a day. This level of production will force the market for natgas to fall below $4. You just cannot have this level of production without a dramatic increase in demand. But the demand for natgas is somewhat inelastic because of the difficulty in quickly switching large segments of the US economy to natural gas. We are seeing more and more busses, garbage trucks and other fleet vehicles moving to natural gas. But it takes time for these transitions to happen. The level of natgas production has increased in several times the increase in demand. If Roby is right, shorting ung will be the only possible way to make money off of natgas in 2011.
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