Oil versus Natural Gas

Oil ticked over $75 today. Long time readers know I have long been bullish on Energy, Oil, and the Agricultural sectors. But what happens when some of the components within a strong sector start to diverge from each other?

Michael Panzner sends along this interesting comparison between natural Gas and Crude Oil. Typically, there is a normal ratio between the two.

In recent months, crude oil and natural gas traced out a pattern similar to what  happened last year: the former rallied to new highs, while the latter drifted to new lows. Months later, the divergence corrected itself, with oil dropping precipitously and natural gas having a modest bounce.


So which is it . . . ?

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