Everyone is fixated on oil prices right now.
You can’t really blame them.
This is going to continue throughout the winter and into the foreseeable future, or at least until crude rebounds… and it’s incredibly great news for you.
Let’s face it: the entire sector has been getting crushed lately; hardly anyone is immune to the volatility.
But that doesn’t mean you can’t earn extra returns in energy right now as you wait patiently for the bears to exit stage left.
Let me show you exactly how…
The Long and Short of Natural Gas
Look, it’s almost too easy to be bullish on natural gas over the long term.
However, the biggest mistake you could make is to see natural gas as the heir apparent to oil.
That’s simply not true.
Just take a look at the reality of our energy situation:
Last year, nearly three-quarters of the United States’ crude oil consumption accounted for 92% of demand in the transportation sector. In order to dethrone oil — even over the course of decades — we would have to see extraordinary growth in natural gas vehicles going forward, and not just in the trucking industry.
Besides, there are better targets to take down than oil — like coal.
Earlier this year, I pointed out that the EPA has been waging a war against the coal industry. No matter which party is in control of Capitol Hill, that anti-coal sentiment won’t change. After all, it’s only been a few weeks since the U.S. chided Japan over its attempt to ramp up coal exports.
Thing is, that’s just a case of the pot calling the kettle black. Unfortunately for the coal industry, it’s much more vulnerable than its petroleum counterpart.
Take a second glance at that consumption chart above.
In 2013, 91% of U.S. coal consumption was used for electric power.
Unlike petroleum, which currently rules transportation with an iron fist, coal accounts for less than half of our electric power.
Coal plants, which were already struggling, have been under fire for the past decade. And I know this isn’t the first time my readers have seen this transition away from coal plants taking place before our eyes…
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And that, dear reader, has directly led to coal losing its share of the electric power sector over the last 60 years:
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Don’t get me wrong, we still use — and will continue using — a tremendous amount of coal, and it remains our third-largest source of energy. The purpose here is to show you that natural gas is going to play a major role in the U.S. energy sector going forward.
Thankfully, the short-term catalysts could provide you with a little relief for your energy portfolio this winter.
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Are These Natural Gas ETFs Still a Buy?
Right now, it all comes down to the weather.
I can’t help but remember back in October when I mentioned The Old Farmer’s Almanac’s prediction for a super-cold winter. Anyone who took advantage of that forecast by picking up a natural gas-leveraged ETF like UGAZ or BOIL was rewarded with quick double-digit gains over the last few weeks…
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Once word of a major storm hitting the upper Midwest (and now projected to sweep across the Northeast, causing a 20° drop in temperatures) reached the markets, natural gas trading on the NYMEX went on a two-week price surge.
So much for an extended natural gas injection season.
In fact, the record injections still haven’t put the United States’ working gas inventories within the five-year average.
Yet you don’t have to rely on price spikes to fulfill your natural gas gains this winter. As you and I are both know, nearly all of the growth in the United States’ natural gas production is from the Marcellus formation — it’s actually masking declines virtually everywhere else.
But there’s an interesting development taking place that will help ease the Marcellus’ burden, and it’s all thanks to a very unlikely group of people: politicians.
The best part is that most of Wall Street is oblivious to the source of this new gas supply.
I’ll have those details for you soon.
Stay tuned.
Until next time,
Keith Kohl
Check us out on YouTube!A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.
Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.
