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The price of natural gas is soaring, with prices rising 50% over the last 12 months. And we see them headed even higher in 2017.
In fact, Money Morning Global Energy Strategist Dr. Kent Moors' natural gas price prediction calls for prices to rise up to 43% in 2017. To help you profit from this price rise, we've compiled our list of the best natural gas stocks to buy now.
While natural gas prices should head higher in 2017, the natural gas stocks we're recommending today have an even higher profit potential. Traders might be tempted to invest in a natural gas ETF, but our stocks have bigger upside potential, and investors won't get bogged down with ETF fees, either.
Just last year, our picks grew an average of 94%, while natural gas prices rose only 55%. And our picks are well-positioned to do the same this year.
Before we get to our top natural gas stocks, here's why we're bullish on natural gas prices...
Why the Price of Natural Gas Is Going Up in 2017
Demand for natural gas is going to rise in 2017, which will drive prices.
Natural gas is traditionally associated with domestic uses, like heating and cooking.
That's why natural gas futures fluctuate based on the weather. A cold winter, for instance, means households use more gas to keep warm. So, when the forecast calls for an unseasonably cold month, natural gas futures go up.
But natural gas has many more uses.
Natural gas is also used for a wide range of energy needs, like fuel for vehicles or power for electricity plants. And it's getting a lot more popular.
One of the main reasons for natural gas' growth is its cleanliness compared to other fossil fuels. Natural gas produces about half the carbon dioxide as coal and oil.
As environmental concerns grow, natural gas has become a more viable option than oil and coal for energy. According to Pew Research, 64% of Americans favor stricter emissions limits on power plants.
That's part of the reason why natural gas use increased 24% between 2005 and 2015. This isn't "typical" growth, either. Natural gas usage actually decreased between 1995 and 2005 by 1%.
Natural gas' appeal as being a cleaner alternative to coal and oil means it will be used for much more than traditional heating and cooking.
Natural gas is already used as fuel in commuter buses and construction vehicles. But it's increasingly used in conventional cars and trucks, too. Investopedia expects the sales of natural gas-fueled vehicles to rise 65% before 2023.
Not only that, but the U.S. Energy Information Administration (EIA) predicts natural gas-fired power plants will add 18.7 gigawatts of capacity between 2016 and 2018. This represents a 20% increase over the average yearly growth of natural gas-fired capacity for the last five years.
As vehicles and power plants transition to a cleaner, affordable energy like natural gas, demand will only increase.
With demand for natural gas rising, companies who produce, transport, and distribute natural gas are getting more valuable. And savvy investors can reap the benefits by finding the right energy stocks.
To help investors take advantage of this new trend, these are our best natural gas stocks to buy now...