There exists several ways in which someone can invest in natural gas. A very popular method is investing in futures and by stock, or the equity side of the business, according to Commodity HQ.
Natural gas is priced in accordance with the market supply and demand factors. The three most important factors that affect the price include the amount of gas being purchased, the transportation cost and the amount of processing required to prepare the gas according to the buyer’s needs.
Examples of the different risks involved with natural gas include volatility of commodity price, possible reserve inaccuracies and regulatory risk, according to The Motley Fool. Additional risks can be discovered by examining the annual reports of natural gas companies.
The average price for natural gas fluctuates quite a bit from state to state, with the states on the East Coast normally paying quite a bit more than most others. In general, states that either produce large quantities of natural gas or are served by major gas pipelines, such as Utah, Alaska, Colora
Futures prices for natural gas vary from day to day and are also based on the delivery date of the contract. Natural gas futures trade at the New York Mercantile Exchange. Futures prices listed on indexes and real time quotes use the unit dollars per million British thermal units.
The primary driver of natural gas prices is a spike in demand when available supplies are low. For instance, natural gas use peaks over the winter due to its use as a heating fuel. Weather and refining capacity problems can also lead to short-term increases in natural gas prices.
The current market price of natural gas can be found on Nasdaq.com. The website provides a graph showing prices changes for a time frame of three months. As of October 19, 2015, the end of day price quote for natural gas is 2.442.
The laws of supply and demand affect the price of natural gas. There are few available short-term alternatives to the product for purposes such as heating and the generation of electricity. Accordingly, when the supply of natural gas goes down, the demand increases, forcing prices to rise.
Gas prices increase as the price of crude oil, needed to produce petroleum, increases. Crude oil prices are affected by supply relative to both the actual and expected demand for petroleum products.
Natural gas prices can be converted from units such as Ccf or Mcf to prices in terms of BTUs, Therms and similar units through the use of natural gas unit conversion charts. Natural gas conversion tools allow simple conversions between natural gas units such as MMcf and BTU, which allows a user to c