Natural gas trading is quite underrated. As concerns over supply of the more ‘normalized’ fossil fuels continue to ramp up, exploration of the semi-sustainable natural gas front is a priority focus for many countries- with a concomitant market movement to match.
Clean burning and efficient, natural gas can also be supplied from within the US, although 84% of the world’s natural gas reserves are held by 15 countries, mostly Middle Eastern. Modern technology increases have boosted yields significantly, although it still lags a little behind traditional fossil fuels. It can be exported in liquefied form (LPG), but is tricky to store, meaning demand is almost always high. Pipelines cannot be run (easily) across oceans, so the LPG technology that is enabling export opens up an interesting market move. This can have various repercussions on the market, and cause great volatility. It has moved from the fossil fuel market throw-away by-product to a critical component of its own. We at CM trading believe there is a good future ahead for the natural gas trading market.
In short, its low priced, has a favorable environment, great economic position and is in rising demand. Natural gas commodities are becoming exceedingly popular on the market, and natural gas trading could well yield spectacular profits to the right person trading at the right time.
Of course, as with all commodities there are no guaranteed returns, but natural gas is a market that has the ‘green’ economy watching with interest. It also produces interesting byproducts due to the need for refinement and removal of chemical compounds. These products in themselves- like ethanol- can also be sold on to refiners who have other uses for them, and contribute to the economy in turn.
Previously, natural gas has been difficult to export as pipes cannot be run to the destination. However the cost of converting to liquid natural gas has dropped considerably of late, and is beginning to open up the possibility of a lucrative export market.
Qatar is currently the world’s home base for natural gas fields, with potential for 1180 trillion cubic feet of gas- about 20 of the world’s supply. However, strained US and Middle East relations do little to foster an environment for safe exports. Over 85% of natural gas is spread between only 15 countries, and the US doesn’t dominate the international arena despite the potential for local domestic consumption.
All of these factors will have a daily effect on the natural gas price movement, as they influence the economy of manufacturing countries, and on export and import.
On the other hand, improving technology makes gas extractions easier, which will increase demand over time. Likewise, you will have issues of domestic vs. international production to balance within the market demands.
Are natural gas trading and the natural gas commodity market right for you? CM trading firmly believes that this commodity market offers a lot of potential.
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Trading Foreign Exchange (Forex) and Contracts for Differences (CFD’s) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin.