Natural gas was looking strong all through the fall months. Now, its at a struggle point once again. Is this a flash back from the past? Sure seems like it. Walter Kurtz takes a look at why natural gas is currently behaving as it is.
1. Storage: Just as in 2010 and 2009 we are at the top of the range and may go even higher if the weather in the NE & Midwest stays warm.
2. Production continues at rates significantly above historical levels.
3. And estimated reserves in the U.S. continue to increase.
It is almost as though the U.S. is becoming the Saudi Arabia of natural gas but with limited export capabilities. No real support for natural gas prices is expected to come until 2013. According to a Goldman report this support will come from moderation in production growth and environmental restrictions that will force conversion from coal burning to natural gas.
The three main points speak wonders, and I think the final paragraph really sums up the problem well. The three points are good things to keep in mind whenever you are looking and natural gad investments. This is a great article for future tips, and as an explanation of our current natural gas status.
Quotes taken from report by Walter Kurtz, Read the entire article here.
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