Since bottoming last year, Natural gas prices have doubled and the trend seems intact. The weekly inventory report clearly shows that the draw from inventory is decent and in fact a tad more than average. Thus, soon the demand will kick in to fill inventory and the companies that will now sell NG to build inventory, will be getting decent prices as well - which means hefty margins and solid bottomline (for those companies that are managed properly).
Due to the warm winter last year, there was too much supply of NG and not much demand. However, given the extended low prices, many 'heavily-leveraged' small NG drillers were forced out of business and their projects cancelled. This means, to regain momentum will take time. Thus, bigger players that had strong financial backing, will benefit most from any uptick in NG prices and demand.
As a result of higher NG prices, Coal will rebound as well as the utility companies will eventually switch from NG to Coal.
Due to the warm winter last year, there was too much supply of NG and not much demand. However, given the extended low prices, many 'heavily-leveraged' small NG drillers were forced out of business and their projects cancelled. This means, to regain momentum will take time. Thus, bigger players that had strong financial backing, will benefit most from any uptick in NG prices and demand.
As a result of higher NG prices, Coal will rebound as well as the utility companies will eventually switch from NG to Coal.
