Natural gas prices today (Monday) have pulled back after last week's rally - but don't let it fool you. Natural gas is going higher in 2015, and there are four major factors that will get it there.
Today, prices were down 0.41% to $2.94 per million British thermal units (BTUs) by 9:30 a.m.
But the drop in natural gas prices today won't stick. One reason is severely cold weather is about to eat up natural gas supply.
Last week's arctic blast hit central and eastern parts of the country and contributed to at least 22 weather-related deaths. The National Weather Service projects another blast extending into March, with extremely low temperatures covering most of the country.
Roughly half of U.S. homes use natural gas for heating fuel, according to The Wall Street Journal.
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Money Morning Global Energy Strategist Dr. Kent Moors told investors back in November that another harsh winter would send natural gas prices soaring. He expects natural gas prices to reach the $4 range thanks to prolonged cold snaps.
Frigid U.S. weather is a short-term natural gas price driver. There are four other long-term catalysts Moors has outlined for readers...
4 More Reasons to Ignore the Drop in Natural Gas Prices Today
According to Moors, there are four "super shifts" in motion that will send natural gas prices higher this year.
One is increased use of natural gas in electricity generation.
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This nationwide transition from coal to natural gas has been going on for some time. Several coal-dominant regions of the country have already reached usage equilibrium with gas.
But the move to natural gas is gaining momentum.
"By 2020, at least one-third of the U.S. generating capacity derived from coal will have been retired since 2012," Moors said. "The vast majority of that will be switching over to natural gas."
"We are now on track to exceed the predictions I made several years ago," said Moors. "I initially estimated that each 10 gigawatts (GW) of generating capacity would require an additional 1 billion cubic feet of gas per day. That now stands at an additional 1.2 billion cubic feet of gas per day, with at least 30 GW moving over to gas.
"To put this in perspective, this transition alone - ignoring any of the impact on coal from the intensifying Environmental Protection Agency standard increases - will eliminate almost twice the current natural gas storage surplus nationwide."
That's just one of Moors' four natural gas industry "super shifts." Here are the other three - and how they're the salvo of investing opportunities in several areas of the natural gas market...
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- The Wall Street Journal: Natural Gas Prices Climb