Why Natural Gas Prices Will Stay Low For Years

It seems like every trader I know points to natural gas and wants to buy it. After all, it is super cheap compared to just a few years ago!

The chart shows a high of almost $18 compared to the current $3. This massive bear market occurred because of the dramatic explosion of new natgas supplies. We got a rally back up to $6.50 in early 2014 but the price was smacked back down to under $3.

I’m not interested in trading natgas at all. It’s boring and there is almost no likelihood of a major bull or  bear market. Here’s why.

Let me let ace energy analyst Kent Moors (http://oilandenergyinvestor.com) explain:

“Natural gas inventory at the end of July came in 23% higher year-on-year (after two months of declines). That figure is estimated to reach 3.867 trillion cubic feet (tcf) by the end of October (and the end of the summer refill season) – 69 billion cubic feet (bcf) above the five-year average and the second highest on record.

2015 demand should end up at 76.5 bcf per day (bcf/d), or 27.9 tcf for the entire year. This is up 4.08% from 2014.

Gas marketed production is expected to grow by an annual rate of 5.4% in 2015, to 78.72 bcf/d, and to rise 2.3% in 2016, to 80.52 bcf/d. That puts it at an estimated total of 28.7 tcf for 2015.”
OK, that’s a lot of numbers. Let me refine it for you.
We’re going to produce way more natgas that we will consume for years.
Down the road, the increased demand for natgas for things like power generation will finally cause a major bull market. But we are years away from that. 
In the meantime, stand aside. I’ll keep you posted when the time comes to play the natural gas market.
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One Response to Why Natural Gas Prices Will Stay Low For Years

  1. Bobby says:

    Four score and seven minutes ago, I read a sweet artecli. Lol thanks

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