Photo: CNN via YouTube
Ever since the recent financial crisis bottomed, oil prices have shot upward while natural gas prices have collapsed.This has caused the widely watch oil/natural gas ratio to surge.
In recent weeks, however, that spread has dramatically reversed: crude prices have plummeted while natgas has rallied — the former on the economy, the latter on production cuts.
Just today, crude contracts dipped below $79 for the first time since December.
Here’s the story in chart form:
Photo: Bespoke Investment Group
Why this matters is pretty straightforward: If we’re sure we want to switch over all our utilities to cheaper and cleaner-burning natural gas (ala the Pickens Plan), this does not help.