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The natural gas index, a component of the energy price index, was up 7.5% month-over-month – its largest month-over-month increase since October 2005. The past 12 months have seen the natural gas index gain 16.4%.
Meanwhile, as Russia's conflict with Ukraine and the West continues to fester, pressure is escalating for the federal government to free-up export policies on U.S. liquefied natural gas (LNG). At present, U.S. exports of natural gas are delivered to only a few countries, no U.S.-LNG goes to Europe.
Russian President Vladimir Putin has been playing a large role in natural gas stock news of late. His threats to restrict natural gas supplies to Ukraine and the European Union (EU) have heightened the seriousness and importance of U.S. LNG exports as a way to balance the growing world energy demands. The pressure is a bullish sign for natural gas stocks in 2014.
Natural Gas Stock News and the Marcellus
The shale oil and gas boom is changing U.S. energy trade. According to the most recent natural gas stock news, production in the Marcellus region, located in the eastern part of the U.S., is rising faster than anticipated. Moodys, the U.S. Energy Information Administration (EIA), and Morningstar.com report that the Marcellus shale gas fields will be the most industrious shale-gas play in the U.S. within the next few years.
"Since the early 2000s, technological progress has permitted U.S. natural gas producers to redefine the industry mostly through the growth of Marcellus," stated one analyst. "The Marcellus has materialized as one of the most lucrative areas in the United States for producing natural gas. Therefore, even if prices go back to the feeble levels of 2012, natural gas assets will be recompensed."
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In addition, Morningstar.com anticipates that the Marcellus will be responsible for one-quarter of all United States natural gas production by 2015, going from 14 billion cubic feet daily to 20 billion. According to an EIA statement, Marcellus shale gas production has already expanded to the point where if it were a country unto itself, it would place third behind Russia and the remainder of the U.S. Because Marcellus is predicted to have at least 30 to 75 years of natural gas reserves, there will be decades' worth of profits for companies operating there.
A number of natural gas stocks from companies such as Cheniere Energy Inc. (NYSE: LNG), Sempra Energy (NYSE: SRE), Ultra Petroleum (NYSE: UPL), and Cabot Oil & Gas (NYSE: COG) are expected to reap bigger profits than expected due to their ties with the Marcellus region.
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- Bureau of Labor Statistics: Consumer Price Index Summary, April 15, 2014
- The National Association of Home Builders: Natural Gas Prices Increase Sharply in March