Why I’m Buying Natural Gas

As the United States freezes under a blanket of snow, reportedly expected to reach up to 40 inches thick, traders should be looking to cash in on the abnormally cold weather by investing in Natural Gas.

As well as being the world’s largest producer of Natural Gas, the US is also the world’s largest consumer of Natural Gas – used to power air conditioning units in the summer and heating units in the winter.  Prices have been on a steady and quite steep decline, having fallen from a 16th Feb 2015 peak of 6.135 per unit to today’s price of 2.141 per unit, having gained a little since hitting a decade’s low price of 1.767 per unit.

Whilst geo-political events in Russia and the Ukraine, as well tensions in Turkey, have failed to disrupt any production or supply lines, prices have been consistently falling due primarily to a combination of mild summer and winter weather in both the UK and the US, and the heavy decline in the US Dollar following prolonged speculation as to whether or not and indeed when, the Federal Reserve would raise interest rates for the first time in over a decade.

The cold weather snap, which has already claimed the lives of 19 people in the US, has been felt globally with even the Pyramids in Egypt under snow for the first time in 112 years. This should increase the demand for natural gas, which in turn, should raise prices, making Natural Gas a good BUY opportunity.

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Daniel Simmons