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Natural Gas Prices

Article Index

Natural Gas Prices Could Triple – And So Could Your Profits

By , Contributing Writer, Money Morning -

Natural gas prices are finally turning around, hitting multi-month highs - and piquing the interest of legendary investors who say the commodity has a lot higher to climb.

While most commodities are moving lower in price - some quite sharply - natural gas has soared in 2013.

The June natural gas futures contract on Monday settled at $4.392 per million BTU, putting it up 31% so far this year. This makes natural gas the top performer among the 24 commodities in the Standard & Poor's GSCI index.

Noted contrarian investor Jeremy Grantham of GMO Asset Management is among the natural gas bulls. He recently told a value investing conference in Toronto that investing in natural gas at today's low prices is a no-brainer.

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The Best-Performing Commodity of 2013 is Just Heating Up

By , Money Morning -

Gold and silver are in the midst of an ugly selloff, but the best performing commodity of 2013 continues to ramp up.

Believe it or not, it's natural gas.

After increasing 1.2% Wednesday, natural gas prices now stand around $4.20/mmbtu- up more than 120% from a year ago and almost 30% this year alone.

By comparison, gold prices are down 18% and silver prices are off over 23% since the beginning of 2013.

The good news for natural gas investors is that there are still plenty of reasons why natural gas will continue its recent run.

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Why I'm So Bullish About Natural Gas

By , Global Energy Strategist, Oil & Energy Investor • @KentMoors_OEI -

I just arrived in Texas yesterday for my latest round of oil meetings.

But my interest has moved in another direction.

Natural gas futures have closed at levels we haven't seen in quite some time, reaching $4.14 per 1,000 cubic feet on Thursday. As gas settles north of $4, that means the prospects for natural gas investors continue to improve.

In fact, there are a number of profitable ways to make money as prices continue to rise.

Why Oil Prices Aren't Coming Down Despite Big U.S. Oil Boom

By , Associate Editor, Money Morning • @DavidGZeiler -

The dual promise of the U.S. shale oil boom was that it would reduce our dependence on foreign oil and lower oil prices that would benefit U.S. consumers via cheaper gasoline.

But while U.S. oil production continues to rise, and gasoline consumption continues to fall, gas prices have remained stubbornly high: The national average was about $3.65 last week.

And that trend is expected to continue, with the United States surging past Saudi Arabia as the world's largest producer of crude oil as soon as 2020. Meanwhile, U.S. gasoline demand is at its lowest in more than a decade - down to 8.7 million barrels a day.

Facts like that have led some pundits to predict falling oil prices. Last year, some politicians were promising that stepped-up U.S. oil production could lower gasoline prices to $2.50 a gallon.

Frustrated U.S. drivers struggling to cope with high gas prices were eager to believe such promises, no matter how unlikely.

Unfortunately, all that new U.S. oil, while helpful in some ways, will not have much effect on gas prices - either now or in the foreseeable future.

"The problem is that prices are not just reflective of new supplies, either too much or too little," explained Money Morning Global Energy Strategist Dr. Kent Moors. "By focusing only on how much is there, these analysts provide a fundamentally distorted view of the oil market."

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Why Britain is Looking to U.S. for 20 Years' Worth of LNG

By , Money Morning -

With its domestic natural gas reserves nearly depleted, the U.K. is turning to a U.S. company to supply enough liquefied natural gas (LNG) to provide energy to nearly 2 million British homes for 20 years.

The $15.1 billion-plus deal between Houston-based Cheniere Energy Inc. (NYSE: LNG) and Centrica, a British energy firm, marks the first time Britain has ever imported natural gas from the U.S.

The deal has big implications for companies involved in the flourishing U.S. shale gas industry, in which gas is extracted through hydraulic fracturing, or fracking.

You see, fracking has led to an abundance of natural gas and will go a long way toward making the U.S. a net exporter of energy instead of a net importer in the coming years.

That, of course, will be a big boon to natural gas companies that export LNG.

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The Best Way to Invest in the Natural Gas Rebound

By , Global Energy Strategist, Oil & Energy Investor • @KentMoors_OEI -

With natural gas prices inching up toward $4 per 1,000 cubic feet on the NYMEX futures market, let’s talk about how investors can make some money off this.
In fact, what’s happening now is just the beginning. My own estimate remains for an average price of about $4.35 come high summer, absent any unforeseen developments, with an increase to $4.85 to $5.15 by the end of 2014.
So, as the natural gas rebound continues, what opportunities should you target?
Here’s the winning strategy...

Five Reasons Why Natural Gas Prices Will Continue to Rise

By , Global Energy Strategist, Oil & Energy Investor • @KentMoors_OEI -

Not long ago, the financial pundits were claiming that natural gas prices would remain around $3 per 1,000 cubic feet well into the foreseeable future.
But guess what? They couldn't have been more wrong.
Prices are creeping back up in a significant way. According to the EIA, last week Henry Hub prices increased from $3.57 per million British thermal units (MMBtu) to $3.72 per MMBtu. And today, all the conditions exist for much higher prices.
For investors that means there will be plenty of new opportunities developing now that just didn't exist six months ago.
Here's what you need to know.

Why This Chinese Company Is Investing in U.S. LNG

By , Money Morning -

A private energy company based in China is reportedly investing in the construction of a network of liquefied natural gas (LNG) fueling stations in the United States.

According to a Reuters report, ENN Group Co. Ltd. is teaming with a small U.S.-based company, and the partnership plans to open 50 to 60 LNG fueling stations this year. LNG stations cost an average about $1 million each to build, industry experts say.

ENN has already built a number of natural gas fueling stations in China, which is much further along in use of LNG for heavy trucks than the United States.

LNG's been promoted by investors such as T. Boone Pickens and natural gas producers including Chesapeake Energy Corp. (NYSE: CHK) as a cheaper, cleaner fuel for long-haul trucks.

Now more natural gas companies are teaming up to provide LNG, which means more investment opportunities for energy investors.

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Cheap Natural Gas Prices Give Hope to this U.S. Industry

By , Contributing Writer, Money Morning -

While natural gas prices are up 50% from their 2011 lows below $2 per 1,000 cubic feet (million BTUs), they're still cheap at just over $3.

Lower-priced natural gas has helped a number of industries, like chemicals and utilities, cut costs, as Money Morning Global Energy Strategist Dr. Kent Moors pointed out in his 2013 natural gas price outlook.

Now there's another U.S. industry that hopes cheap natural gas can revive its flagging performance.

I'm talking about steel.

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Five U.S. Natural Gas Companies Set to Soar from an Export Boom

By , Money Morning -

A U.S. Energy Department study released Dec. 5 has intensified the debate on what America should do with its abundance of natural gas - which could lead to huge opportunities for natural gas companies.

You see, critics of exporting natural gas have argued that exporting the resource to global markets would hurt the U.S. economy by raising natural gas and oil prices.

But last week's NERA Economic Consulting study, done at the DOE's request, showed the United States would get a positive economic boost from exporting liquefied natural gas (LNG), even under all possible scenarios in which exports are envisioned.

"Across all these scenarios, the U.S. was projected to gain net economic benefits from allowing LNG exports. Moreover, for every one of the market scenarios examined, net economic benefits increased as the level of LNG exports increased," the study found. "In particular, scenarios with unlimited exports always had higher net economic benefits than corresponding cases with limited exports."

The study could increase the chances of the Energy Department approving permits for natural gas companies to build LNG export facilities. Only one company has ever been approved to build an LNG export terminal, and at least 15 more LNG export projects are waiting for the green light.

Here's why companies are vying for a piece of the LNG export market.

How LNG Leads to Profits

LNG is simply natural gas in liquid form, and when it is liquefied the cooling process actually reduces the space LNG occupies by more than 600 times.

That makes transporting LNG on tankers much easier than moving natural gas through pipelines. It also allows companies to sell natural gas overseas, where natural gas prices at $11.83/MMBTU are about 3.5 times higher than U.S prices at $3.4/MMBTU.

Money Morning Global Energy Strategist Dr. Kent Moors says the export of LNG from the U.S. to global markets "is the single most significant change in the energy market for the next several decades."

"American operating companies recognize the LNG market will provide a major outlet for surplus production," said Moors. "Last week while I was in Moscow, Russian natural gas giant Gazprom again gave an estimate. They now believe that the U.S. will account for 9-12% of the world's LNG flow before 2020 from 0% today."

Natural Gas Companies to Watch

Some U.S. natural gas companies are ahead of competitors in setting up LNG-export facilities.

Investors who want to profit from LNG exports should keep an eye on these:

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2013 Natural Gas Forecast: Six Bullish Reasons Why Now Is The Time to Buy

By , Global Energy Strategist, Oil & Energy Investor • @KentMoors_OEI -

Natural gas is developing into a very different market from oil, one that offers plenty of opportunities for investors to make big profits in 2013.

There are two contrasting dynamics when it comes to natural gas prices. First, the amount of recoverable volume has been accelerating, thanks to increasing unconventional (shale, tight, coal bed methane) reserves and technological improvements to extract it.

A rise on the supply side would generally reduce prices, especially if the number of operators continues to increase. More gas moving on the market from more suppliers results in a downward pressure on prices.

The second dynamic, however, is moving in the other direction, enticing the increase in drilling and expansion of infrastructure.

This factor considers the demand side, and there are at least six major trends colliding to increase the prospects for gas usage as we move through 2013.

As a result, I expect natural gas prices to see a 25% increase from current levels... here's why.

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Get Ready to Play Higher Natural Gas Prices with These Picks

By , Contributing Writer, Money Morning -

After natural gas prices hit a decade low in 2012 of below $2 per million BTU, they're up about 80% from a year ago, trading around $3.60 this week.

Looks like the six-and-a-half year bear market in natural gas maybe be coming to an end.

Falling with natural gas prices has been related investments. That means investors can go shopping now for low-priced natural gas plays before prices climb.

As Money Morning Global Energy Strategist Dr. Kent Moors said, the road to profits will not be straight up. Volatility will cut in both directions.

But the natural gas market is getting stronger.

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