Why Natural Gas Commodities are in the spotlight
Natural gas trading is quite underrated. With a concomitant market movement to match, exploration of the semi-sustainable natural gas front is a priority focus for many countries As concerns over supply of the more ‘normalized’ fossil fuels continue to ramp up.
Some interesting facts about the natural gas trading market
Natural gas is efficient and burn clean. It can also be supplied from within the US, although 84% of the world’s natural gas reserves are held by 15 countries, most of which Middle Eastern. Although it still lags a little behind traditional fossil fuels, modern technology increase has boosted yields significantly. Natural gas can be exported in liquefied form (LPG), but is tricky to store as the demand is almost always high. The LPG technology enabling the export opens up an interesting market move because pipelines cannot be run (easily) across oceans. This can have various repercussions on the market causing great volatility. It has moved from the fossil fuel market throw-away by-product to a critical component of its own and we, at HighFxMarkets, believe the future of the natural gas trading market is bright.
Its price is low, has a favourable environment, great economic position, and is in rising demand. Natural gas commodities are becoming exceedingly popular on the market, and for the right person training in the right time, the natural gas trading could well yield spectacular profits.
Of course, as with all commodities, there are no guaranteed returns. Nevertheless, natural gas is a market that has the ‘green’ economy watching with interest. It produces interesting by-products due to the need for refinement and removal of chemical compounds. Such products – ethanol, for example - can also be sold to refiners who have other uses for them and contribute to the economy in turn.
In the past, natural gas has been difficult to export, as pipes were not spread to all the destinations required. Nowadays the cost for converting it to liquid natural gas has dropped considerably this is and is beginning to open up the possibility of a lucrative export market.
Currently, Qatar is the has the largest natural gas fields, with potential for 1180 trillion cubic feet of gas- about 20 percent of the world’s supply. However, the strained relations between the US and Middle East do little to foster an environment for safe exports. Over 85% of the natural gas is spread between only 15 countries, and despite the potential for local domestic consumption, the US does not dominate the international arena.
All of these factors influence the economy of manufacturing countries, the export and import, and they have a daily effect on the natural gas price movement.
On the other hand, improving technology makes gas extractions easier and over time thus will increase the demand. You will also have to consider issues of domestic vs. international production to balance within the market demands.
Are natural gas trading and the natural gas commodity market the right trade for you? HighFxMarkets firmly believes that this commodity market offers a lot of potential.