In my last article, I discussed how ISIS’ actions in Iraq [1] aren’t likely to send oil prices blasting higher in the short term.
Supplies are simply too plentiful for prices to experience a major spike.
For natural gas, however, a price explosion is imminent…
Indeed, even though natural gas is such an abundant resource, there
are other factors in play right now that point to a significant increase
in prices over the next six to eight months.
In fact, seeing natural gas reach the $6 level by December isn’t out of the question.
A Roadmap to $6 Natural Gas
Remember, the trajectory for natural gas prices is decided mainly by
five factors: usage predictions, demand forecasts, current inventory
levels, a healthy dose of speculation and – of course – the weather.
Let’s take a closer look at the first four…
Price Driver #1: Usage. We’re certainly going to see greater
commercial usage of natural gas – both for transportation (the
fastest-growing segment) and for electricity generation. Because of
tougher carbon emission regulations, many power plants are transitioning
out of coal and into natural gas. (more)
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