Monday, May 28, 2012

Natural gas world changing


Look at the up trend in natural gas volatility. It is a new world and it is more uncertain. The lower price for natural gas means there will be more switching between gas and coal. Demand for gas right now is more uncertain and may be more sensitive to changes in weather which will drive peak demand. It is also more uncertain what will be the supply outlook. There is the expectation that supply will decrease but there is more uncertainty on when and how much. Natural gas may be a key market to watch because there will be the higher degree of uncertainty.

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