Topic: How To Invest

Special Report on Liquefied Natural Gas for Inner Circle members

Article Excerpt

Natural gas prices recently dropped below $2 U.S. per million British thermal units (BTUs), a 10-year low. Prices have since moved up somewhat, to $2.87. Shale gas discoveries continue to increase supply. At the same time, demand is slowing due to the weak global economy. Shale gas is trapped in rock formations. To extract it, producers pump water and chemicals into the rock. This fractures the rock and releases the natural gas. Gas production is also growing as a by-product of drilling for more profitable crude oil and natural gas liquids, such as propane and butane. Even so, the long-term outlook for gas is positive—and one big reason is the prospect of rising liquefied natural gas (LNG) exports to countries like Japan, China and South Korea, where gas sells at a big premium to North American prices. Shares of big natural gas producers rose recently after Petronas, the Malaysian state oil company, made a takeover offer for Progress Energy (Toronto symbol PRQ) at a..