Furthermore, even in this best case scenario, until the end of this decade at least, natural gas stocks still have the potential to benefit, and perhaps even thrive, as coal use is phased out. However, that is quite far in the future. If all goes to plan, then natural gas will be more or less redundant by 2050. They further project that, in this net zero scenario, by 2030, natural gas will still account for around 17% of total global energy production, falling to just 0.4% by 2050. ![]() In order to comply with the Paris Agreement, where 192 states and the EU agreed to limit global warming to no more than 1.5☌, the world must reach net zero emissions by 2050.Īlthough natural gas is a fossil fuel, and its use has a negative impact on the environment, it is actually the cleanest-burning fossil fuel, meaning that it has a key role to play on the road to net zero as a “bridge-fuel” whilst we wean ourselves of the more harmful alternatives.Īccording to the International Energy Agency (IEA), even in a net zero by 2050 scenario, power generation by natural gas will increase in the short-term, as it replaces coal, before falling in the late 2020s. In 2020, natural gas alone generated around 24% of total global energy 1. How to Buy Natural Gas Stocks in 5 Stepsīefore we look at some of the top natural gas stocks in 2023, let’s first look briefly at why investors would want to invest in natural gas stocks in the first place.ĭespite the much vocalised global transition away from fossil fuels to greener energy solutions, both crude oil and natural gas still account for the majority of the world’s energy consumption.We forecast that natural gas prices will fall in early 2023 because of more domestic natural gas production, less LNG export and domestic natural gas demand growth, and more natural gas placed in storage. We expect that natural gas storage levels will be 9% below the five-year average at the end of October, the beginning of this coming heating season. Natural gas inventories started the 2022 summer injection season (April through October) 17% below the five-year (2017–21) average. We expect dry natural gas production will average 96.5 Bcf/d in 2022, which is 3.2% (or 3.0 Bcf/d) higher than the 2021 average.īecause demand for natural gas has outpaced production, natural gas inventories have remained low. production of dry natural gas to increase in 2022, but not as much as demand. High international natural gas prices may also lead to more U.S. LNG cargos have gone to Europe, compared with 34% in 2021. exports of liquefied natural gas (LNG) will remain high during this summer, partly as a result of Russia’s full-scale invasion of Ukraine. However, this fuel substitution has been relatively limited in recent months because of supply constraints in the coal market and historically low coal stockpiles. electric power sector, power plants have tended to consume more coal as natural gas prices increase. electric power sector will average 0.9 billion cubic feet per day (Bcf/d) more in 2022 than in 2021, even though we expect the Henry Hub price to be $3.49/MMBtu higher. We expect that consumption of natural gas in the U.S. electric power sector has remained high despite high natural gas prices. natural gas prices to remain relatively high in 2022 because of lower-than-average natural gas inventories resulting from factors affecting both supply and demand.Ĭonsumption of natural gas in the U.S. ![]() Henry Hub benchmark in Louisiana averaged $8.14 per million British thermal units (MMBtu) in May 2022, and we expect the Henry Hub price to average $8.71/MMBtu this summer (June through August). natural gas spot prices will increase again this month and then remain high through the rest of 2022. ![]() In our June 2022 Short-Term Energy Outlook (STEO), we forecast that U.S. ![]() Energy Information Administration, Short-Term Energy Outlook (STEO)
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