Matt Bidiali gives us some insight into the potential of investing in natural gas for electrical power.
Natural gas is the new go-to source for electrical power. And the price of natural gas could soar in 2018. Here’s why . . .#Energy #NaturalGas #investing #Markets #Commodities #BanyanHill $DIG $DUG $UNG https://t.co/WIw7KglLIj
— Matt Badiali (@Matt_B_Guru) December 19, 2017
Natural gas is an alternative for generating power. This development has a potential to raise natural gas prices in 2018. Natural gas has been a distant second to coal as a means to generate electricity despite being an excellent source of fuel. Its natural properties enable it to release only two molecules during combustion: one of water and the other of carbon dioxide. The two factors that expanded coal’s widespread dominance over natural gas was portability and inexpensiveness. Whereas, processing natural gas’s movement without pipelines was tough and expensive.
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In the 1990s, the shale revolution resulted in plunging the price of gas. Pipelines were put in all over the place, and the natural gas subsequently displaced coal. Using natural gas to generate power was relatively an easy process as it was easier to supply gas than truck in coal fuel continuously.
The quick generation of electricity has made natural gas an in-demand fuel. You can power up a gas turbine to produce electricity right away. It can also supplement alternative power sources such as wind and solar, at times when there isn’t enough or any wind or sunlight.
However, when the demand for natural gas rose significantly, so did supply. This resulted in a price collapse from $14 per thousand MCF in 2008 to $1.65 in March 2016. The drastic drop in price occurred over just a period of 8 years.
The chart used by Matt Bidiali demonstrates that in 2014, the amount of stored gas was the second-lowest over the years. It’s first lowest was in 2010, ever since the Energy Information Administration started monitoring this data.
Every year the natural gas production is placed in storage all summer, so that the supply is utilized to generate electricity the following winter. But when the gas storage in 2014 featured as a notable low, the prices soured as more and more people were reliant on it. It is likely that we witness this trend again in 2018; hence, we can secure a good investment.
Matt Badiali is an experienced geologist and an investor who maintains a foreseeable approach to understanding the prospects of investments. His research has enabled him to visit a number of countries ranging from Switzerland to Iraq to Hong Kong to Singapore and to many other countries. He’s explored a number of mines and oil wells throughout the world and interacted with CEOs inquiring about their resource prospects. He’s our go to guide to learn the intricacies of a successful investment by making astute deductions.