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long term natural gas price forecast

2012 Natural Gas Price Forecast: Why to Avoid the "Widow Maker"

I've been watching natural gas for years now and find myself shaking my head lately.

The cost to buy the "clean energy" is collapsing as crude oil, a product that needs refining, stays above $100 per barrel.

In fact, this chart for natural gas is what I call a Widow Maker.

Take a look...

As you can see, it shows the price of the March 2012 NG contract over the past two years - and it's not pretty.

Why Natural Gas Prices Will Continue to Drop

The last time I wrote about natural gas for Buy, Sell or Hold was November 2010.

At the time, natural gas was about to start its most seasonally bullish period of the year. I recommended a multi-month trade with an exit by the end of the March 2011 contract.

However, this year is completely different. Natural gas has collapsed in price instead of climbing during the peak winter cold months.

While it's been a warmer than normal winter across the United States, especially in the Snow Belt, this price drop has more to do with U.S. production rising on a year-over-year basis than it does the weather.

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