If, as an investor, you're surprised by the ongoing anomaly in the oil/natural gas relationship, you're not the only one.

The background: Oil historically trades at about 8 times the price of natural gas. Currently it's trading at 25.8 times natural gas. About three months ago, the ratio was 20.

In late Tuesday afternoon trading, oil (West Texas Intermediate) was up $3.60 to $100.578 per barrel, while natural gas was down 16 cents to $3.88 per million British thermal units (MMBtu).

A new study conducted by the Massachusetts Institute of Technology states that natural gas usage will double in the next several decades, from the present 20% to 40%.

Why natural gas? First off, we have plenty of it. Globally, we have a century and half of recoverable natural gas. In the Unites States, the amount of recoverable gas is equal to 92 times consumption.

The Energy Department said that its statistics on natural gas production are wrong.

The Energy Information Administration, the statistical arm of the Energy Department, regularly issues its 914 report which is used by the industry and analysis as guide for everything from making capital investments to predicting future natural gas prices and stock recommendations.

Something's got to give regarding oil and natural gas prices: the gap between the two is too large -- oil is currently 15.7 times the price of natural gas, when the historical average is about 8.4 over the past decade.

Oil traded Friday afternoon up 62 cents to $79.68 per barrel, while natural gas is down 11 cents to $5.06 per million BTUs (MMBtu).

Something's got to give regarding the price disparity between oil and natural gas.

Natural gas, although off its lows for the year, is still cheap at about $4.85 per million Btus (MMBtu), largely due to record stock piles, as a result of the U.S. recession and probable increased reserves in the years ahead, stemming from shale gas.

Go figure the energy markets. Oil, which despite the U.S.'s worst recession in more than a generation, never really approached its 150-year real average of $25-30, is trading around $72 per barrel.

Meanwhile, a prime competitor, natural gas, hit a 7-year low Thursday, falling through the psychologically-significant $3 per million BTUs (MMBtu) level on rising supplies and low demand from industry and power plants.

Last year when crude oil prices rose to $147.00 per barrel, many homeowners and businesses converted from oil to natural gas.

On Wednesday, U.S. gas futures fell to $3.049 per mBtu, the lowest in seven years, as the market remains oversupplied.

Now enters a large unknown hedge fund that spent millions buying $10.00 January and February call options. The options give buyers the right to purchase natural gas at $10.00 per million BTUs.

The United States is a nation whose electric power generation system and grid is becoming increasing inadequate, even as the nation grapples with another energy problem -- the $4 per gallon gasoline era.

Moreover, an economic slowdown and a relatively mild summer have to-date reduced the typical electric load electric power generation plants would face, but that respite will end when the U.S. economy starts to expand at a healthy rate again. And when it does, electric power demand will increase.

What's one model the United States could follow to generate more electricity while the same time reducing coal-based pollution and climate change? France.

That's right: France. Nuclear power is experiencing a mild comeback in the United States, with 34 new reactor applications on file at the U.S.'s Nuclear Regulatory Agency. In France, it never left. Further, had the United States followed the French model, the U.S. would be vastly more energy self-sufficient today.

France: liberty, fraternity, equality, fission

Nuclear power never went out of style in France, and for this reason France is decades ahead of the United States -- and much of the world, for that matter -- regarding energy self-sufficiency, The New York Times reported. An astounding 77% of France's electricity comes from its 58 nuclear power plants, and it is a net-exporter of electricity to Europe. The United States has 104 nuclear power plants, which account for only 19.4% of its generated electricity, according to U.S. Department of Energy data, The Times reported.

That the developing and developed world will need considerably more electricity in the decades ahead would not surprise most investors / readers.

That both economic zones can achieve this goal while adding a minimal amount of soot to the atmosphere, however, would.

And the technology that will undoubtedly serve as a key energy-generation component in emerging markets' 21st century power grid? You guessed it: nuclear power -- the power generation form that has lagged in the United States for more than 20 years, due to environmental regulations.

China, India push forward with plant plans

China and India are two emerging market nations that recognize that nuclear power is an essential part of meeting future electricity demand. Nuclear power will account for more than 5% of China's power output by 2020, Bloomberg News reported Monday. Meanwhile, India will start three nuclear reactors this year.

Economist Glen Langan said that while nuclear power is not, strictly speaking, a renewable energy, it has to be considered as part of the next-generation energy mix [along with wind and solar power] to meet the U.S.'s growing demand for electricity.

The record run of oil, already up a gaudy 400% since 2000, continues, with prices breaking through $122 per barrel on Tuesday, May 6, 2008.

Meanwhile, gasoline prices, up about 20% in the past six months alone, and about 100% in the past four years, show few signs of moderating in the months ahead.

It's the era of high oil/energy prices, and until a readily-available, affordable energy substitute is found and/or oil prices decline, the oil / oil services sector will be in demand, which bodes well for Occidental Petroleum Corporation (NYSE: OXY).

Oil closed Thursday up $2.95 to $102.59 per barrel -- another record-high print close -- after a combination of geopolitical, production, and trading factors sent investors piling into crude oil futures as an investment/inflation hedge, Bloomberg News reported Thursday.

Earlier in the day oil hit an intra-session high of $102.70 -- within 10 cents of the all-time high, in inflation-adjusted terms, of $102.80 per barrel set in April 1980.

The other major energy commodities also rose. Heating oil surged about 6 cents to $2.83 per gallon, unleaded gasoline climbed about 2 cent to $2.49, and natural gas rocketed 39 cents to $9.45 per million BTUs.

Devon Energy (NYSE: DVN) is an oil/natural gas exploration company, with operations in the U.S., Canada, and abroad.

Readers of this space know that one argument forwarded here is that in the era of elevated energy prices, oil/natural gas companies are likely to remain promising plays for the foreseeable future, baring the discovery of a cheap, widely-available, alternative energy. And among oil/natural gas companies, Devon Energy is worth an evaluation.

Analysts like DVN's sizable proved oil/gas reserves of 2.34 billion barrels of oil equivalent. Production volume should increase 4-5% in 2007 and 7-11% in 2008. Analysts also like Devon's strategy decision to sell international assets with lower growth prospects. Meanwhile, the company's overall costs remain reasonable.

Oil plummeted $2.38 to $89.52 in early trading Wednesday after the U.S. Energy Information Agency announced that weekly crude oil inventories rose 4.3 million barrels to 287.1 million barrels, well above the 1.25 million barrel increase consensus estimate.

Heating oil fell 4 cents to $2.49, unleaded gasoline fell about 5 cents to $2.26, and natural gas fell about 4 cents to $8.15 per million BTUs.

However, despite the prospect of a U.S. recession that could lower oil demand, the International Energy Agency maintained its 2008 global oil demand forecast at 87.8 million barrels per day, a 2.3% increase from 2007, the organization announced Wednesday in a statement.

Still, the IEA qualified its 2008 oil demand projection by saying the estimate would be adjusted downward if evidence indicated the U.S. economy continues to slow.

Readers of this space know that one argument forwarded here is that in the era of elevated energy prices, oil and natural gas companies are likely to remain promising plays for the foreseeable future, barring the discovery of a cheap, widely available, alternative energy. And among oil/natural gas companies, Ultra Petroleum is worth an evaluation.

Ultra Petroleum (AMEX: UPL) is in independent oil/natural gas company with core properties in the Green River Basin of southwest Wyoming

Analysts like UPL's proven reserves of 2.4 trillion cubic feet of natural gas equivalent, modest cost structure, adequate-to-good pricing power and likely production increases. The latter stems from the start of operations at the Rocky Express Pipeline in 2008, among other efforts. Further, look for UPL to attract increased attention from investors as the value and benefits of natural gas rise amid continued high oil prices. The Reuters F2007/F2008 EPS consensus estimates for UPL are $1.29/$2.37.

Oil pressured $99 per barrel before easing back in Monday morning trading, as traders anticipated another bullish week for oil prices with the winter season approaching.

Jim Dietz, an independent energy trader, told BloggingStocks that weather will begin to play a larger factor in the oil markets.

"Up until now it's been emerging market demand, gasoline use, geopolitical concerns, and the falling dollar that's been supporting oil's price. Now that colder temperatures are here, the winter season will begin to act as a support for prices," Dietz said. "Not that the other factors have disappeared, it's just that we'll watch heating oil's price. Heating oil supplies are O.K. right now, but if heating oil climbs, it will force the price of crude oil higher."

In the U.S., heating oil and crude oil demand peaks during the December-February period, the Northern Hemisphere winter.

Heating oil rose about 1 cent to $2.71 per gallon, unleaded gasoline gained about 1 cent to $2.47 per gallon, and natural gas climbed $0.245 to $7.946 per million but in Monday morning trading.