Natural Gas

The reason why natural gas commodities are becoming popular

Worries about future supply opportunities of traditional fossil fuels are rampant around the world, and hence a number of countries are shifting their attention to natural gas. This has its respective effect on the market.

Specifics of the natural gas market

84% of the global reserves of natural gas are in only 15 countries. Most of those countries are in the Middle East. Still, natural gas can also be supplied by the US. Innovative technology has been used to substantially improve yield. Yield still is slightly lower than this for traditional fuels, and there is place for improvement. Natural gas can be transported as LPG (liquefied. While LPG storage is tricky, LPG is enabling export where pipelines cannot reach (e.g. it’s very hard to cross oceans with pipelines). Opening up LPG export shifts the market in new ways, which can cause high volatility. In fact natural gas has become a more and more important commodity. At FxtPremium we believe in the future of natural gas.

Reasons for choosing natural gas

The reasons are simple, yet very convincing – the commodity is cheap, the environment is good, the demand is rising, and the economic position is excellent. The popularity of this product is constantly rising and trading this commodity may bring about massive revenue, if you approach it correctly.

Additionally, there are by-products of gas refinement (like ethanol) – these can also be sold and have their economic impact.

There are never full guarantees, as with any trading of commodities. Nevertheless, natural gas is becoming more and more interesting.

Parameters influencing prices?

Until recently, gas was almost not exportable without the help of pipes. The possibility of liquification, combined by lowering liquification prices, are changing the landscape, bringing about a promising market.

As clarified earlier, the large percentage of global natural gas is in only 15 countries, and the USA is not amongst them, despite being a chief potential consumer.

The biggest natural gas resources are in Qatar, which boasts about 1180 trillion cubic feet of gas, and can provide 20% of all the global gas. The unstable environment and complex relationship between the Middle East and the US are detrimental to export opportunities. This instability affects prices on a daily basis, through political repercussions on the economies and export/import capabilities of producing countries. At the same time, it’s likely that demand will surely be on the rise in the future, especially considering the constant improvement of extraction technologies.

Additionally, problems are inevitable when the question of domestic vs. international gas production comes along.

It is indeed a complex market. Is it for you? We believe that it has a very good potential.

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