i found a article of NG forecast in 2015. thanks by the end of 2015 natural gas will trade around $6.50. That's one heck of a move.
What would fuel that move? For one thing, demand is expected to rise. Houston-based investment bank Simmons & Company estimates that demand for U.S. natural gas will climb from about 70 billion cubic feet (bcf) per day, to as much as 90 bcf per day by 2020.
Simmons says that higher demand will start pushing up prices within 12 months.
Some of that demand will come from U.S. manufacturing, which continues to rebound. Durable goods orders are increasing and flash manufacturing purchasing managers' index hit a 52-week high at the end of the summer. Today it is sitting at 57.9, well above the neutral 50.0 value. Bullish? I'd say so, yeah.
But the big demand for U.S. natural gas will come from exports. For example, Mexican demand for U.S. gas exports has surged 92% over the past five years. Plenty of new pipeline projects are snaking their way across Arizona and Texas, with an eye on exporting more natural gas to Mexico.
And there are a lot more exports to come. Liquefied natural gas (LNG) exports will start in 2015 and there are 20 export licenses for LNG pending (two are already approved). I expect prices to rise in anticipation of further exports.
There are also new sources of demand that most Americans don't even know about yet. For example, China gets just 5% of its total energy from natural gas. The U.S. is the world's top gas producer and gets 26% of its total energy from gas.
Yet China already has 1.5 million vehicles operating on natural gas, while the U.S. has just 250,000.
Does that math make any sense to you? Heck, no! And I think that math is going to change in a big way.
More Opportunities Around the Corner
And here's the funny thing. Even if U.S. natural gas prices doubled, it would still be cheap compared to what they're paying in Europe and Asia. So, many of the same economies that are driving the natural gas production and natural gas-fueled manufacturing booms would remain in place.
I like that math, too. That's the kind of math that can put a lot of profits in your pockets.
But what's the best way to play it?
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