If there is one ratio in the commodities market that completely out of whack, it has to be the price of crude ($wtic: chart) to natural gas ($natgas: chart).

From 2000 to the end of 2005 the ratio of the crude oil price in $/bbl to the price of natural gas in $/MMBtu was around 7:1.

Today, that ratio is a little over 18:1.

The price of crude oil started its ascent towards record highs in 2006, and natural gas supplies started creeping upwards, also to record highs about that same time.

If one were thinking about the ratio alone, you’d surmise that either crude prices need to fall or natural gas prices need to rise to trend back towards that 7:1 ratio.  The problem with this logic is that crude and natural gas now contend for markets with drastically different scopes.

Crude is truly a global commodity as evidenced by the geography of the crude reserves and the intercontinental demand for the black gold from the Middle East.  Natural gas on the other hand is very localized, and this is due primarily to the transportation and infrastructure differences between the two energy resources.

Natural gas is relegated to pipeline transportation (with the exception of limited LNG movement via ships) whereas crude oil is fit for pipelines, freighters, tankers, rail…

So you can start to see the conundrum.

The holy 6:1 ratio (based purely on energy content) is not so holy any more, and natural gas and crude have devolved into completely unrelated markets.

For now.

I suspect that if we continue to see natural gas supply levels stay up, and prices stay low, that more and more industries will shift to natural gas for purely economic reasons.

I predict that natural gas draws will start increasing this winter, and the price will reflect that.

As for the ratio, I suspect it will start to moderate, but not because crude oil prices start retreating.

Energy crude oil, crude to natural gas ratio, natural gas

I stumbled upon a new service from the end-all-be-all Google that may be the next step in the evolution of mobile communication.

Effectively, Google Voice merges traditional cell phone and land line service in to voice over IP (VOIP) data streams, and then back into cell phone or land line technology, and it sounds pretty cool.

Once you are invited to use the service, you select a Google Voice number which could have an area code from anywhere in the United States.  You can then set up Google Voice to ring any phone you want when someone dials that number.  For instance, when you dial my Google Voice phone number, I can set the program up to ring my cell phone, office phone or home phone… but what’s really cool is that I can set it up to ring all three at the same time.

So I could be at the office and leave the cell phone at home and you’d still be able to reach me.

Some other impressive features are the transcribed voice mail (Google Voice will email you a transcript of the voice mail), the ability to play voice mail back through a web interface, and you can even screen or block calls.  Google will mark annoying telemarketers as Spam, much like they handle spam in Gmail.

The service is still in its infancy, and you still have to be invited, much like Gmail originally.  However, I suspect that Google Voice will morph into a service that will compete with Skype and give your cell phone company a run for its money.  What’s neat about Google Voice is that you only need an Internet connection to use it, meaning you’d only need a data plan on your smart phone, and not necessarily a voice plan…

If you’ve got experience using Google Voice, I’d love to hear about it.

More information here.

Technology cell phone, Google Voice, Technology

So long Emigrant Direct, it’s been nice.

I began pulling all my money out of Emigrant Direct and Dollar Savings Direct (effectively one in the same).  I rode the eroding interest rates down hill, although their current rates are still slightly better than I can get just about anywhere else.

The real deterrent was the fact that I couldn’t add my new USAA Savings account as an approved funding account without filling out paper work and sending in a voided check.

In my opinion there is no reason for this.  I was able to set up my Bank of America funding account electronically with no hassles other than waiting for verification of the account.  To require paper forms and a voided check for additional accounts seems illogical and unnecessary.

So I’ve pulled all the money out of both accounts and will dump it back into my USAA savings.  From there I may move it around to take advantage of increasing interest rates in the future, or may buy some short term CD’s.

Banking Dollar Savings Direct, Emigrant Direct, savings, USAA