Natural gas can't catch a break

Nothing seems to be going right in this stranded sector right now.

By Jim Cramer Mar 26, 2010 6:53AM
Jim Cramer

By Jim Cramer, TheStreet

 

Natural gas is in purgatory. These stocks can't win for losing.

 

It looks like the Environmental Protection Agency is coming down on new ways to drill, the price of the commodity can't increase to save its life, and Congress isn't ready to debate use of the fuel.

 

Falling below $4, its lowest since September, may be the last straw for a group that has no place to put its inventory and no new contracts to burn it off. In other words, whatever the expectations are for natural-gas demand, they don't include using all that is obtainable from the Marcellus or Barnett shales.

 

That's why Devon Energy (DVN) is getting hit the hardest, since it is all-in on domestic natural gas, having shed its big overseas oil properties. But Anadarko (APC) was also hit, even though it still has sizable oil exposure.

 

The drillers are giving up the ghost big-time as Schlumberger (SLB) gets cautious.

 

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To me, the only thing that saves this group right now is valuation based on the possibility of President Obama being a one-term president, so a more drilling-friendly president can come in.

 

That's a very long time to wait in purgatory, for sure.

 

At the time of publication, Cramer had no positions in the stocks mentioned.

 

Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.

 

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