Natural Gas price drop offsets Crude
Updated
With everyone in the general media chirping about the rise in crude oil this year, I can't help but wonder why there isn't a massive wave of good news about how "low natural gas prices are". We all know the media loves to get attention and fear, uncertainty and anger work much more effectively at capturing the ears of a weary audience.
Wouldn't it make sense to be happy in the knowledge that the US produces excess amounts of natural gas that it has enough to turn into LNG and ship overseas.
I am not an environmental expert, so please don't attack me for the dangers of fracking and the pollution of groundwater, etc. Clearly, there are costs to having electricity, warmth and power to run machines that make our lives easier and better.
Either way, if both NatGas and Crude are 3% of our economy (+/- from data from 2021), then we can see that this isn't "inflationary" at all since crude is down MORE than crude oil is up. Yet, every time I hear on Bloomberg TV that crude oil is causing massive inflation it makes me cringe because it doesn't match how I am looking at the world.
Good luck navigating the markets.
Cheers,
Tim West. 10:59AM EST Sep 26, 2023
Wouldn't it make sense to be happy in the knowledge that the US produces excess amounts of natural gas that it has enough to turn into LNG and ship overseas.
I am not an environmental expert, so please don't attack me for the dangers of fracking and the pollution of groundwater, etc. Clearly, there are costs to having electricity, warmth and power to run machines that make our lives easier and better.
Either way, if both NatGas and Crude are 3% of our economy (+/- from data from 2021), then we can see that this isn't "inflationary" at all since crude is down MORE than crude oil is up. Yet, every time I hear on Bloomberg TV that crude oil is causing massive inflation it makes me cringe because it doesn't match how I am looking at the world.
Good luck navigating the markets.
Cheers,
Tim West. 10:59AM EST Sep 26, 2023
Note
Looking at Natural Gas long term, the price is down in the bottom end of the range nominally and down more than 30% from the first time NatGas futures started trading. See chart above.
The low cost of energy, long term, has benefitted our society as a whole and given us freedom to travel, to have electricity and have bountiful crops (since NatGas is the main ingredient in fertilizers).
Cheers,
11:08AM EST, Sep 26, 2023
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