Last week I bought a bunch of Encana Corp., the largest Canadian natural gas producer. Natural gas prices are way down as a result of the mild weather so far this winter, depressing Encana’s share price. Encana peaked near CAD 70/share at the peak in natural gas prices, and is selling now in the CAD 54 range. I had owned it for some time and sold it last summer, largely because it had gained so much it didn’t seem reasonable that the gains could continue. Not smart, but at current prices I get a do-over.

Natural gas isn’t just a winter story anymore. I thought this was a good opportunity to increase my exposure to a fundamentally strong supply/demand situation. The supply of natural gas in North America is declining due to depletion, most new power plants in the US burn natural gas for environmental reasons, and more Canadian gas will be needed to “liberate” the oil from the Athabasca tar sands. We’ll see.