Prices of natural gas fell almost 6% today, well below $3 per thousand cubic feet. Natural gas prices have been quite low for a sustained period of time as supply of the fossil fuel is abundant. Many natural gas companies are investing heavily to become more oily. Take Carrizo Oil & Gas for instance, which now gets 50% of its revenues from oil, compared to just 10% a year ago. This shift to the higher-prices oil should prove to be a wise strategic move for the company, as oil remains extremely profitable.
The warmer winter in the united States has not boded well for natural gas, which is mainly used for heating. In Canada however, the winter has been quite frosty, allowing Canadians to make use of the cheap, weightless fuel. Canadian companies such as Enbridge, a natural gas toll-road essentially, whose business depends less on the price of natural gas, and more on the usage, should continue to benefit in this weather.
The United States has not yet made any real movements toward using natural gas as bridge fuel away from oil. The country has a massive supply of the fuel, yet continues to important a large chunk of its oil, as there has been little support from congress for a natural gas bill. Any bill that would help to convert cars to run on natural gas could essentially save Americans hundreds or even thousands of dollars a year on fuel, which has been acting as an additional tax and crippling the economy.
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