New drilling technology and techniques are enabling previously undevelopable shale gas to come on line and the U.S. has now become the Saudi Arabia of natural gas (natgas).
A common question being asked around the energy patch is “with so much natural gas set to hit the market, where is it all going to go and how can you benefit from this abundance of natural gas?”
A common question being asked around the energy patch is “with so much natural gas set to hit the market, where is it all going to go and how can you benefit from this abundance of natural gas?”
Natgas prices are at rock bottom. In just one year, prices have fallen 44% for the front-month (circa April 2012) Nymex contract.
This is in stark comparison to what is happening in the oil patch. Even though more shale oil is being produced today than a few years ago, the demand for oil is still severely outpacing supply and that is the primary reason you see gasoline prices rising.
With the glut of supply taking over the natural gas market, this post will provide the right perspective to take on this trend and how to turn this glut of supply into gains.
Start by keeping in mind a key pillar of proper investing; do NOT lose money or keep your loses to a minimum.
So let’s begin by reviewing what NOT to invest in.
1. The price of natural gas. You do not want to be long natgas via a commodities contract of the popular natgas ETF UNG. The way the market is shaping up, there will need to be a catalyst to get prices headed higher and there is still NO light at the end of the tunnel.
2. Large propane distributors. With natural gas production comes a lot of the associated “wet” liquids like propane. After monitoring big names in the U.S. propane arena, it is clear that companies like AmeriGas are not able to squeeze higher margins out of more supply.
3. Companies that are solely basing profits on liquefied natural gas (LNG) exports from the U.S. as these are not considered long-term winners.
Now that we have review what not to invest in let’s take a look at a few of the long-term winners that will profit with more natgas coming online.
Natural gas producers that can leverage the liquid’s rich sweet spots. Some natgas drillers will make money no matter how low the price of natgas goes. That is because these producers will be selling “wet” gas byproducts like propane, butane, or ethane. Drillers that can leverage higher margins with wet byproducts will excel in this sector.
Midstream players. If you are privy to the oil and gas industry terminology, you know that “upstream” players are in the business of finding and producing oil and gas, downstream players are in the business of marketing and selling the final product, and midstream players do a lot of the processing and transporting of oil and gas. Midstream players are set to have a field day with all of these wet liquids coming online. Processing plants and “fractionators” will be running full tilt and they will be able to squeeze margins where others can not.
Large integrated oil and gas companies. With natural gas prices in the doldrums, now is a good time to look at the larger companies that produce oil, natgas, and other chemicals. These integrated majors will have the ability to aim at higher-margin business units while steering clear of the low margins of “dry” natural gas. As an example, both Chevron and Shell have refining and midstream capabilities, plus both are highly engaged in producing more profitable oil.
Just because natural gas prices are obscenely low doesn’t mean energy investors can’t make a buck. The ideas above will help you do just that.
America’s natural gas boom is spurring more activity and cheap energy than anyone would have ever imagined. Over the next five to ten years, there will be plenty of innovative ways for this godsend to be used.
I trust this post has provided some background and evidence that now is a good time to benefit from America’s overabundance of natural gas. Investing in natgas ideas include chemical producers, manufactures, and other industrial players as they will have a high incentive to utilize this cheap energy source and improve their business operating margins and profitability.
I favor a quote from Steve Forbes. Forbes says that pursuing additional financial education and the resulting increase in our financial literacy (including the investment in natgas opportunities) will open our eyes to alternative wealth creating strategies and this will be the key to resolving our global financial crisis.
To gain the necessary financial education, it is best to obtain association with, access to, and membership in a wealth creation community. As a result, you will learn and have the knowledge to use alternative wealth creating strategies such as Bank on Yourself, debt reduction, and asset protection. You will be exposed to wealth acceleration investments in areas (discussed in this and previous blog posts) such as natgas opportunities, a VC mutual fund, smart wallets, the mobile market in China, imminent banking revolution, the power of Compound Interest, new internal-combustion engine designs, the shale gas revolution, surfing the mobile wave, the space gun technology boom, the wireless data boom, the smart power grid, nanotech being applied to biotech, biotech and nanotech converging with the semiconductor industry, electric cars, new access to space, 3D virtual technology, atomically precise manufacturing, nuclear power generation, commercial space ventures, Carrier Ethernet technologies, nanotech lithography, robotics, nano-based next-generation battery technology, precious metals, water rights, oil, natural gas, potash mines, food commodities, and gold mines. You will have the knowledge to consider investments in assets that are inherently useful like oil rigs, hydropower, or methanol plants; things that are hard to build, difficult to replace, and costly to substitute; definitely not financial stocks, definitely not retail stocks, definitely not commercial property.
Another benefit of membership in a wealth creation community is exposure to entrepreneurial leadership and business opportunities. Many of these leaders suggest that if you don’t focus on being a digital entrepreneur, being self-employed, or being a small business owner, it will be a very tough road in the months and years ahead; actually it will be an uphill battle. As a result, the innovative wealth creation communities provide education and training on B2B, and B2C, eCommerce enabling a new breed of professionals that are creating six figure second incomes.
It is wise to monitor breakthrough technology as there are truly exciting developments underway as part of the overabundance of natural gas and related business activities. I will continue to monitor developments and provide updates in future articles and at my blog.
Finally, I want to thank Byron King of Outstanding Investments, published by Agora Financial, as he was the source of some of the materials about the technology advancements mentioned in this post.
In closing, be sure to Read More of my Posts on my Internet Marketing blog at aspenIbiz BlackBox; Obtain Some Tips About Being No 1 on Google at aspenIbiz My Go-To-Market Partners, my Affiliate website; Learn How to be Savvy with Your Money Like the Insiders at aspenIbiz The Conspiracy For Your Money Blog, and How to Live Longer at aspenIbiz My Life’s Advantage Today site.
Please be sure to share this post with anyone that you think would benefit from this message… thanks!
This is in stark comparison to what is happening in the oil patch. Even though more shale oil is being produced today than a few years ago, the demand for oil is still severely outpacing supply and that is the primary reason you see gasoline prices rising.
With the glut of supply taking over the natural gas market, this post will provide the right perspective to take on this trend and how to turn this glut of supply into gains.
Start by keeping in mind a key pillar of proper investing; do NOT lose money or keep your loses to a minimum.
So let’s begin by reviewing what NOT to invest in.
1. The price of natural gas. You do not want to be long natgas via a commodities contract of the popular natgas ETF UNG. The way the market is shaping up, there will need to be a catalyst to get prices headed higher and there is still NO light at the end of the tunnel.
2. Large propane distributors. With natural gas production comes a lot of the associated “wet” liquids like propane. After monitoring big names in the U.S. propane arena, it is clear that companies like AmeriGas are not able to squeeze higher margins out of more supply.
3. Companies that are solely basing profits on liquefied natural gas (LNG) exports from the U.S. as these are not considered long-term winners.
Now that we have review what not to invest in let’s take a look at a few of the long-term winners that will profit with more natgas coming online.
Natural gas producers that can leverage the liquid’s rich sweet spots. Some natgas drillers will make money no matter how low the price of natgas goes. That is because these producers will be selling “wet” gas byproducts like propane, butane, or ethane. Drillers that can leverage higher margins with wet byproducts will excel in this sector.
Midstream players. If you are privy to the oil and gas industry terminology, you know that “upstream” players are in the business of finding and producing oil and gas, downstream players are in the business of marketing and selling the final product, and midstream players do a lot of the processing and transporting of oil and gas. Midstream players are set to have a field day with all of these wet liquids coming online. Processing plants and “fractionators” will be running full tilt and they will be able to squeeze margins where others can not.
Large integrated oil and gas companies. With natural gas prices in the doldrums, now is a good time to look at the larger companies that produce oil, natgas, and other chemicals. These integrated majors will have the ability to aim at higher-margin business units while steering clear of the low margins of “dry” natural gas. As an example, both Chevron and Shell have refining and midstream capabilities, plus both are highly engaged in producing more profitable oil.
Just because natural gas prices are obscenely low doesn’t mean energy investors can’t make a buck. The ideas above will help you do just that.
America’s natural gas boom is spurring more activity and cheap energy than anyone would have ever imagined. Over the next five to ten years, there will be plenty of innovative ways for this godsend to be used.
I trust this post has provided some background and evidence that now is a good time to benefit from America’s overabundance of natural gas. Investing in natgas ideas include chemical producers, manufactures, and other industrial players as they will have a high incentive to utilize this cheap energy source and improve their business operating margins and profitability.
I favor a quote from Steve Forbes. Forbes says that pursuing additional financial education and the resulting increase in our financial literacy (including the investment in natgas opportunities) will open our eyes to alternative wealth creating strategies and this will be the key to resolving our global financial crisis.
To gain the necessary financial education, it is best to obtain association with, access to, and membership in a wealth creation community. As a result, you will learn and have the knowledge to use alternative wealth creating strategies such as Bank on Yourself, debt reduction, and asset protection. You will be exposed to wealth acceleration investments in areas (discussed in this and previous blog posts) such as natgas opportunities, a VC mutual fund, smart wallets, the mobile market in China, imminent banking revolution, the power of Compound Interest, new internal-combustion engine designs, the shale gas revolution, surfing the mobile wave, the space gun technology boom, the wireless data boom, the smart power grid, nanotech being applied to biotech, biotech and nanotech converging with the semiconductor industry, electric cars, new access to space, 3D virtual technology, atomically precise manufacturing, nuclear power generation, commercial space ventures, Carrier Ethernet technologies, nanotech lithography, robotics, nano-based next-generation battery technology, precious metals, water rights, oil, natural gas, potash mines, food commodities, and gold mines. You will have the knowledge to consider investments in assets that are inherently useful like oil rigs, hydropower, or methanol plants; things that are hard to build, difficult to replace, and costly to substitute; definitely not financial stocks, definitely not retail stocks, definitely not commercial property.
Another benefit of membership in a wealth creation community is exposure to entrepreneurial leadership and business opportunities. Many of these leaders suggest that if you don’t focus on being a digital entrepreneur, being self-employed, or being a small business owner, it will be a very tough road in the months and years ahead; actually it will be an uphill battle. As a result, the innovative wealth creation communities provide education and training on B2B, and B2C, eCommerce enabling a new breed of professionals that are creating six figure second incomes.
It is wise to monitor breakthrough technology as there are truly exciting developments underway as part of the overabundance of natural gas and related business activities. I will continue to monitor developments and provide updates in future articles and at my blog.
Finally, I want to thank Byron King of Outstanding Investments, published by Agora Financial, as he was the source of some of the materials about the technology advancements mentioned in this post.
In closing, be sure to Read More of my Posts on my Internet Marketing blog at aspenIbiz BlackBox; Obtain Some Tips About Being No 1 on Google at aspenIbiz My Go-To-Market Partners, my Affiliate website; Learn How to be Savvy with Your Money Like the Insiders at aspenIbiz The Conspiracy For Your Money Blog, and How to Live Longer at aspenIbiz My Life’s Advantage Today site.
Please be sure to share this post with anyone that you think would benefit from this message… thanks!
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