The Bull Market You’re Not Watching

Volatility has returned to the markets this week.

Stocks have looked shaky. Precious metals were torn to shreds…

But there’s one commodity that’s outperforming everything this year: natural gas.

It’s the bull market no one’s watching…

Natural Gas vs. Gold and S&P 500

Natural gas jumped to 21-month highs yesterday. The spot price is up nearly 30% on the year. Compare that to gold’s 17% slide year-to-date—or even the broad market’s 8% returns. While everyone is wrapped up in gold’s tumble and the “death of commodities” meme, natural gas is dominating the market.

The nat gas rally is far from over. Last week’s Energy Information Administration report detailing billions of cubic feet of gas storage came in way below expectations. And U.S. nat gas drilling rigs remain near 14-year lows.

Daily Resource Hunter’s Matt Insley explains:

“Around this time last year I was forecasting a “no room at the inn” scenario for the glut of natural gas. After all, there are only so many storage tanks and underground caverns to hold the stuff and when you looked at the continuing rise of production it was only natural to think we’d be filled up sooner than later.”

“However,” he continues, “that never happened.”

“I truly underestimated America’s ability to use cheap energy. That is, with natural gas trading around $2 all kinds of latent demand popped out of the woodwork. Power plants converted to nat gas, manufacturers quickly opened their doors and refiners started using the stuff full tilt…”

That’s how you get explosive price action like we’re witnessing in the nat gas market right now…

However, Matt doesn’t think you should get overly excited about nat gas producers just yet. Instead, he offers a better opportunity to play the trend:

“With natural gas prices firming up and oil prices expected to be above $80 for as far as the eye can see, we could be in for years of “midstream” growth opportunity,” Matt advises. “Midstream is the logistical stage of gathering and processing oil and gas.”

That looks like a safe bet. The midstream market leaders are all showing impressive double-digit gains so far this year…

Greg Guenthner
for The Daily Reckoning

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

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