We have now reached an undersupplied U.S. natural gas situation, winter is approaching, and industrial demand may be about to improve due to a rebounding economy. These factors should soon combine to create a turning point in natural gas pricing. In fact, longer term gas contract prices have stabilized. The current price of natural gas also makes solar and wind power (which are currently government subsidized) unprofitable. And though the Obama administration has not been an advocate of expanded use of natural gas so far, a growing chorus of influential Democratic Party thinkers has been extolling the benefits of this domestic energy source as a transition fuel. The political landscape may soon turn more positive.
Given its plentiful supply and its low carbon footprint, natural gas is an investment that has significant upside potential. Some stock investors have begun to anticipate just this possibility: natural gas E & P stocks have been going up while the commodity price has fallen. The next six months should be particularly interesting for this sector.
Rick Morgan
Mike Timm
Coincidentally enough National Public Radio (NPR) has been featuring a three part series on natural gas this week. Check it out at http://www.npr.org/templates/story/story.php?storyId=113080237.