Natural gas is a fossil fuel that is used as a heating source for residential buildings and also has commercial and industrial uses. Natural gas contains other elements that must be filtered out to make it commercially useful. Ethane, propane, butane, helium and hydrogen sulfide are all removed in the filtering process, and refiners will sell these as well.
Natural gas itself was once considered a useless “byproduct” of oil production. Yet over the years the technology has advanced enough to make natural gas the cleanest-burning fossil fuel. Considered more efficient and more environmentally friendly than crude oil, natural gas is the cleanest-burning fossil fuel, and methods of capturing, transporting, and distributing natural gas are constantly improving.
Natural gas is difficult to store unless converted to liquid natural gas. Most natural gas is supplied through pipelines directly from the gas fields.
Factors That Can Influence Natural Gas Prices
- To solve the problem of transporting the gas, liquid natural gas is now gaining a foothold in the marketplace. The costs of producing liquid natural gas have dropped, making it a viable alternative to importing and exporting crude oil.
- Qatar is the largest exporter of Liquid Natural Gas worldwide, and is quickly becoming the world leader in LNG exports as well as a leader in natural gas production.
- Political unrest in natural gas producing countries can affect exports and supply worldwide.
- When trading natural gas, the weather also plays a role in supply and demand. Since natural gas is used to heat homes, colder or milder temperatures can affect prices.
New technologies are making natural gas a reliable alternative to crude oil. Demand is growing, but regional instability, especially in the Middle East, can affect prices.
Anyone who wants to trade natural gas should be aware of the many factors that may influence prices.Trade Natural Gas