Natural gas is cheap, but where does it go from here?

In the energy markets, traders call it an anomaly or a price discrepancy, sometimes with a rational basis, sometimes not.

Case in point: the oil/natural gas price ratio. A barrel of oil contains about 5.8 million British thermal units (BTUs) of energy. Therefore, oil should be priced at approximately 5.8 times the price of natural gas.

The 25-year average for ratio of oil-to-natural-gas is 8.6 times natural gas. Today, however, with oil trading at about $67 per barrel and natural gas at about $4 per million BTUs, the average is about 16.8 times natural gas' price.