Natural Gas Stock Of Choice?
For many years, natural gas has been known for its volatility in price. Big swings up and down have created a rather risky investment environment. After the development of fracking technology natural gas prices tanked dropping to around $2 million BTU in April 2012. The technology that made the energy less expensive for consumers also drove prices down for investors. However, as time as gone on, many people have switched from coal-fired power to gas-fired power. That in combination with plans to export natural gas has created a higher demand, which in turn has raised prices to a high of $4.43 BTU this April.
Natural Gas Stocks Still Suppressed
A logical conclusion from the rising demand for natural gas, combined with the higher prices, would be that gas stock for natural gas companies should also be performing really well. Interestingly enough, these natural gas stocks have not moved upwards in proportion with natural gas prices, meaning that as this trend continues we could see prices go up significantly in the remaining part of 2013. Particularly, stocks in companies who have the lowest production expenses, coupled with being tied directly to the natural gas prices; those stocks have significant upward growth potential.
As the stock market and the bond market appear to be reactionary to the Fed’s threats to cease quantitative easing, it’s important to recognize that there are still things out there with investment potential. For more information on natural gas specifically, or to learn about other investments expected to perform in today’s economy, speak to a Redhawk Wealth Advisor near you today.