Natural Gas Prices Sink With the Slowing Economy
The economy has hit a bit of a slump recently. Various commodity stocks are down, including oil and natural gas. Not only is the U.S. economy slowing, but the global economy is losing strength even further. What does this mean for natural gas? Clifford Krauss gives his opinion about the economy’s relationship with natural gas prices.
…The slowing global economy has led to declining demand for oil in Europe and the United States and has curbed consumption growth in China and other developing countries.
Gasoline consumption in the United States was down 2.5 percent in September compared to the same period a year ago, according to a MasterCard Spending Plus survey. The survey has shown declines of 2 to 3 percent in the four-week moving averages of gasoline consumption every week since the week ending Aug. 5, reflecting a decline in economic activity.
Oil prices have also fallen in part because Europe’s financial crisis has weakened the region’s currency, the euro. Oil is denominated in dollars, so it becomes cheaper to buy in dollars when the greenback is stronger.
Oil supplies around the world remain tight, but they have eased, too, in recent months…
…Mr. Kloza predicted that gasoline prices would continue to fall to around $3 in the coming months. “That will be the launching pad for 2012, and we will overreact in the spring and prices will flirt with $4 again,” he added, since oil and gasoline prices normally rise as the summer driving season approaches….
Looks like the predictions are that natural gas prices are going to remain lower than average for quite a bit of time. 2012 might be where things begin to change. I don’t know about you, but I would love to see the economy and natural gas back on its two feet again. Common’ 2012!
Quotes taken from report by Clifford Krauss, Read the entire article here.
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