In contrast with the strong performance of oil in 2009, the US natural gas market has seen steady downward pressure – and looks ripe for a rebound, says Mark Lacey, Global Energy portfolio co-manager at Investec Asset Management.
“Onshore overproduction of gas has been met with declining industrial demand,” he says. “While long-term US gas prices – 2011 and beyond – are above $7.20 per million British thermal units, spot prices have collapsed to about $3.80. This is the equivalent of about $23 a barrel of oil, making gas by far the cheapest source of energy in the US.”
