Even now, after several years of hype, investing in natural gas remains one of the best ways to cash in on the biggest U.S. economic boom in decades.
And 2014 figures to be the year when all the catalysts driving the U.S. natural gas industry come together.
Already U.S. natural gas production is one of the most stable and intelligent investments available. And given that midstream providers typically offer higher-than-average yields as well as heavy capital appreciation potential, investing in natural gas stocks offers a rare double-upside scenario.
Now add in five big trends for 2014 that all point to higher natural gas prices.
If you aren't already investing in natural gas production or midstream development in the United States, it may be time to reevaluate your investment strategy. Yes, the potential for this sector is that impressive.
Why 2014 Is the Year for Investing in Natural Gas
Let's take a closer look at the top five trends that will propel natural gas stocks in 2014…
Investing in Natural Gas, Reason No. 1: The Export Boom Is In Reach
Now that 2014 is here, the U.S. liquefied natural gas (LNG) trade is almost upon us. Companies have begun construction of LNG export terminals and locked in long-term contracts with customers around the world.
From 2014 to 2018, the international LNG trade will offer investors extremely attractive opportunities as the global market begins to take shape. The International Energy Agency (IEA) reports that an estimated 138 billion cubic meters of LNG production is under construction right now.
But that capacity is going to skyrocket to more than 500 billion cubic meters over the next five years, as the United States and other exporters begin to supply customers with desperately needed sources of energy… And we're talking about multi-decade deals between U.S. suppliers and global customers that will ensure steady profits for years to come.
The IEA predicts that 80% of LNG exports will end up going to customers in Asian nations, particularly heavy manufacturing-based nations like China and Japan.
Money Morning Global Energy Strategist Dr. Kent Moors has highlighted Cheniere Energy Inc. (NYSE: LNG) as one of the best prospects in this sector for its export contracts set for development through the Sabine Pass in late 2015. There is still time for investors to get in on companies building these export terminals, but every day we get closer to the huge economic boom the LNG trade will create for the United States.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.