Now is the perfect time to invest in natural gas stocks.
To many investors, that may seem counterintuitive. After all, natural gas has been the red-headed stepchild of energy for years.
But prices for this plentiful alternative fuel are just beginning to turn higher after a four-year slide that saw values slashed by more than 80%.
That price decline - from a high of $10.38 per million British thermal units (BTUs) in July 2008 to just $1.83 in April of this year - was primarily the result of a decade-long increase in U.S. gas production, which climbed by 21.6% from 2002 to 2011.
That trend finally has begun to reverse, as the rate of inventory build-up has fallen steadily for almost three months. What's more, the size of the current natural gas surplus relative to year-ago levels has fallen by 23% since late March.
Three big reasons explain this shift: