Why Natural Gas Commodities are in the spotlight
Natural gas trading has gained some attention in recent times, and it is understandable. There are growing concerns regarding the use of fossil fuels, and with its semi-sustainability gas seems like some alternative. The market movement also reflects that.
What you need to know about the natural gas trading market
The main natural gas suppliers are mostly from the Middle East – countries there hold nearly 85% of the world’s natural gas reserves. Gas is clean burning and efficient, and with the progress of mofern technologies yields are significantly increased, but still falls second to traditional fuels. The specifics of its export, transportation and storage play significant part of the almost constantly high levels of demand. In this context, the difficult long-distance transportation using pipelines creates interesting situation due to the possibility of export in liquid form (LPG) and the development of the LPG technology. All of this contributes to the significant volatility of the market which has grown as a separate unit from the fossil fuel market. Here at ECNpremium we consider natural as market as environment where opportunities are only going to grow in the future.
Natural gas commodities hav several key advantages – they are low priced currently are positioned in a positive environment with unique economic position, and to top that off, demand is surging. All of this makes natural gas commodities the rising star on the market, which means that if executed in the right time and circumstances, natural gas trading can be extremely profitable.
There are of course some risks and profit cannot be 100% guaranteed. Natural gas has some products, like ethanol, which make it especially interesting for the green economy as well. These byproducts can be sold separately to refiners and become individual players in the economy.
The development of LPG technology and simplifying natural gas export has significantly dropped the price for transportation and this creates opportunities for development of highly profitable export market.
Currently, Qatar is the largest natural gas supplier, with production potential of 1180 trillion cubic feet of gas which equals to nearly 1/5 of the world’s supply. The development of international relations (specifically these of the US with the Middle East) however puts some stops to the development of safe export conditions despite the potential of the US market as a consumer.
Everything said above affects the market price of natural price on a daily basis, as well as the producers’ economy and export and import conditions.
At the same time technology development has already simplified the gas extraction methods and that is expected to lead to rise in demand. As with oil, you need to also take into account the complicated relation between domestic and international production.
So, is it worth to invest in natural gas trading to diversify your portfolio? We at ECNpremium say yes – this commodity has some great potential for you to make use of.