Since the start of the year, the price of crude oil has risen about 40% while the price of natural gas has fallen by about 40%. Can that divergence be maintained?

A barrel of oil has about six times the energy content of a thousand cubic feet of natural gas. The graph below compares the dollar price of a barrel of oil with the oil-equivalent cost of natural gas, calculated by multiplying the price (in $/1000 cu ft) by six. The two prices tended to move together in the early part of the decade, but have diverged significantly over the last few years, with natural gas today selling for 1/3 the price of oil in terms of BTU content.

Black line. Jan 1998 to Jun 2009: average price over the month of West Texas Intermediate, in dollars per barrel (from FRED). Jul 2009 entry ...

The New York Times has an article today reporting that domestic Natural Gas reserves are 35% higher than previously estimated due to improved ability to tap deep shale deposits. (Zacks Equity Research senior analyst Sheraz Mian has also posted a blog on this earlier.) This helps explain why natural gas prices are so low relative to oil prices. In terms of energy content, there is a 6:1 ratio between an MCF [thousand cubic feet] of gas and a barrel of oil. At the current futures price of $4.12 an MCF, natural gas is going for the equivalent of only $24.72 a barrel, a massive discount to the current $71.06 price of oil. This will make a very significant difference to your energy investments. At least for the near term, look for E&P companies that are "oily," like Denbury Resources (DNR) rather than "gassy" like ...

Louis Basenese is one of the smartest investment analysts I know, and a good friend of mine to boot. And most of the time I agree with his research - and his conclusions. Just not this time.

You see, this past Tuesday, his Investment U article caught my attention. In case you missed it, it was written about green energy. In it, Louis makes an argument for a “green energy super-bubble” that could burst in as little as two or three years, leaving unwary alternative energy investors in the lurch.

In his article, he cites four conditions that exist that make alternative energy ripe for a bubble. Those conditions may indeed be forming, but in and of themselves won’t cause a “speculative bubble.” In this case, there’s definitely more to the story.

The Defense of Alternative Energy & Green Investing

Louis: “The legislation is in place, and more

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Alternative Energy: Why You Can’t Ignore “Green” Investing

by David Fessler, Advisory Panelist

Louis Basenese is one of the smartest investment analysts I know, and a good friend of mine to boot. And most of the time I agree with his research - and his conclusions.

Just not this time.

You see, this past Tuesday, his Investment U article caught my attention. In case you missed it, it was written about green energy. In it, Louis makes an argument for a “green energy super-bubble” that could burst in as little as two or three years, leaving unwary alternative energy investors in the lurch.

In his article, he cites four conditions that exist that make alternative energy ripe for a bubble. Those conditions may indeed be forming, but in and of themselves won’t cause a “speculative bubble.” In this case, there’s definitely more to the story.

The Defense of Alternative Energy &

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Stocks stage huge rally, but will it hold? Key levels to watch, and some historic perspective… Libor continues to ease; famous Wall Street CEO explains why credit still isn’t flowing… John Williams on the “true cost” of the U.S. financial crisis, with charts to prove it… Byron King with an “exploding” foreign resource market…. Plus, a stinging critique of I.O.U.S.A., and one thing you must do before voting Nov. 4.

The Dow logged its second best one-day point gain, 889 points, in its even more storied history yesterday:

Percentage wise, at 10.8%, the rally ranks sixth. The S&P and Nasdaq trundled alongside the old lady like puppies.

After finding a new “credit crisis” low on Monday, traders on Wall Street snapped back with vengeance. But it’s not the higher highs we’ll

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