Off The Rails

Wouldn’t it be horrible if Canadian railway lines were used as back-door routes to move dangerous compressed natural gas east and west from North Dakota on its way to offshore markets?  The U.S. is not without its own railways.

It’s easy to predict the coming conflagration that will cost thousands of lives in the heart of a Canadian city when a tanker train blows sky high in the blink of an eye.  It’s one thing to transport dangerous goods to destinations where they are needed in Canada.  It is quite another to risk Canadian lives to satisfy an insatiable market for exports.

The verdict is in.  Canadians refuse to build safe pipelines and Canadian railway shippers are not up to the task of transporting dangerous cargos.

I wish we could agree.  No more rail movement of dangerous goods destined for offshore markets.

Railway Stupid?

So I think I’m finally catching on to why our railway/energy guys will keep on blowing up trains until they incinerate most of our major North American cities.  All this time I thought it could be explained by terrorism or by the rampant greed that exploded when integrity died.

Today I’m not so sure.  Perhaps our heroes (the train/energy guys) are just brain dead. (ie: stupid).  So we didn’t just lose the gift of integrity – we lost our ability to think – altogether.

It was the giant Gainford Alberta railway propane explosion (Oct 19/13) that spawned this revelation.  After the massive rail disaster at Lac Megantic, how could CN string together nine explosive propane rail tankers and take them all back-to-back through Edmonton and every other mountain town all the way into Vancouver?

It was apparently a 135 car train.  How many cars were transporting propane?  Was it one big long bomb?

Dishonest?  Yes, integrity is history.  Greed?  Without question, but STUPID?  Stupid may be the answer – and because of this reality, our energy starved cities will indeed burn.

My advice?  Don’t buy a house in the brand new subdivision going up beside the railway tracks.  You say you just did?  Railway stupid?

Natural Gas U.S. Futures ($6.18)

Natural Gas has been extremely weak since it passed its $9 seasonal high in early December. I'm still on the sidelines, but now watching for signs of a meaningful short term low, that could set the stage for further intermediate term recovery.

It's wait-and-see, but I suspect that we won't have to wait long to witness the demise of short term selling pressure.

Natural Gas U.S. Futures ($7.15)

As expected, the Natural Gas price has challenged the $7 area on the short term and poked above its 100 and 200-Day Moving Averages.

On a seasonal basis, there is reason to be optimistic about price prospects for Natural Gas. However on the short term, in spite of its recent spike upward, the over all trading pattern remains sluggish. For now I am satisfied with neutrality for both the short and intermediate term, while keeping a watchful eye for a seasonal indication of strength, should it emerge.

Natural Gas U.S. Futures ($5.62)

Natural Gas has gapped up in recent days, indicating a release from the relentless downside price pressure that preceded the demise of the huge Amaranth Hedge Fund. With Amaranth now history, it seems appropriate to revise my short and intermediate term views on Natural Gas.

Over the short term I would expect an eventual challenge of the downtrending 200-Day Moving Average in the area above $7.

I have spoken about year end price strength that often occurs in the case of this commodity. Now that we are post-Amaranth, it is just possible that we have passed an intermediate term low at this point. In order to acknowledge this, I am revising my intermediate term outlook from negative to neutral, with a plan to move toward a positive view if this low is confirmed.

Natural Gas Futures ($5.07)

Natural Gas has gone below short term support at $5.50 and the next obvious support level is at lows that have been in place since 2003 (in the area of $4.50).

The intermediate term outlook is also deteriorating. I have therefore moved to a negative view beyond the near term. Earlier I had written about the seasonal price strength that often shows up in the fourth quarter. No sign of it this year. Just the opposite so far.

Natural Gas Futures U.S. ($5.88)

Natural Gas Futures appear determined to retest the recent low in the area of $5.50. I had assumed that there might be the prospect of launching the seasonal recovery that often leads to attractive gains by year-end. Sorry to say that short term momentum must again be described as abysmal. Intermediate term math models still suggest that a recovery is in the works once the current setback has run its course.