Replies to post #56107 on Zeev's Turnips Patch-No Politics (ZEEV)

[cy esp]

>>Do NG and oil prices tend to move approximately in tandem?<<

No. Oil price is driven by the world demand and world production. Gas price is driven by the North American supply and demand.

Natural gas demand is primarily driven by how warm or cold the winter is in the population centers (industrial activity and summer airconditioning are secondary effects). Supply is driven by capital investment in drilling gas wells with an approx 5-12 month lag.

There is some potential for fuel switching when gas prices are extremely high or oil prices are extremely low but this is somewhat unusual.

Regards, Cy