StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

As Natural Gas Cools, Trading Sizzles - Research Paper Example

Comments (0) Cite this document
Summary
Class: As Natural Gas Cools, Trading Sizzles Introduction The free-fall in the prices of natural gas over the last quarter of this year has had a surprise effect on its trading. For example, more investors have come in to cash on the plummeting commodity…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER92.8% of users find it useful
As Natural Gas Cools, Trading Sizzles
Read TextPreview

Extract of sample "As Natural Gas Cools, Trading Sizzles"

Download file to see previous pages The discussion explains this characteristic by use of the laws of demand and supply in relation to price. The discussion winds up by looking keenly into the words of Wall Street journal reports on the trade benefits if gas prices drop in the short term only to rise in the long term. Increased Trading and Investing Over the past 3 months, the prices in the natural gas have fallen by 53%, hence, revenues for the investors who had invested heavily then are very low. Surprisingly, with the fall in price, the industry has experienced more interest from traders of the commodity than it had witnessed last year at any one point. This has been explained by the fact that as prices have been falling; the transaction costs of the commodity have proportionately been falling too. Many of those investing today are basing their decision on the future expected increases volume in trading expected at 31% increase. The number of new contracts being signed went up to 2.53 million contracts representing a rise of 20% when compared to the same period last year (Cui And Dicolo). Explanation/ Analysis Some investors are investing in the value and the trend in the industry. As the prices continue falling, it is expected that the demand of the natural gas will go up and since the market is far from saturation, the investors want to heavily invest at least in the short run as trading continues plummeting. On the other side, some traders expect that this is the lowest price that the commodity can be traded and that soon, in the long term, the prices will go up and they can in the long run continue trading at the normal or even at a higher price (Cui and Dicolo). Therefore, this is bullish and a bearish market with benefits for both investors. The supplier has flooded the market especially with the newfound shale gas discovery. Since the demand of the natural gas was static with new discovery, the supply outstripped this demand lowering the prices. At 2 dollar’s range, many of the investors who are entering the market expect that with this rock-bottom state in the prices, they can continue trading at a loss or at least minimal returns on their investments because the prices will soon go up. However, analysts are warning that this may not be the rock bottom in essence. Last year, many investors speculated that then the prices were at their lowest only to be surprised that they dipped even lower this year. As Hyland explained, “just because the price of natural gas is trading at 2 dollars it should not automatically mean that they cannot go lower.” These words came true to one Mr. McLane the president of an asset management company who invested in the industry in the hope that the prices were at their lowest only for them to continue on a free-fall this year and he then had to close his position (Lowenstein 14). On the idea of trading on volatility, managers know that it may be profitable to ride in this wave of anxiety. More people are willing to invest in this anxiety than those who are quitting the market. Hence, with various guarantees, some firms are lending out funds to those who are willing to risk in the hope that future prices will go up. To them, it is not about how the bet will go only that whichever way it goes, they will reap their capital and the interest rates that they are lending at. These are the benefits that the capital markets are making out of this volatility. Just like every other ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“As Natural Gas Cools, Trading Sizzles Research Paper”, n.d.)
As Natural Gas Cools, Trading Sizzles Research Paper. Retrieved from https://studentshare.org/macro-microeconomics/1449846-as-natural-gas-cools-trading-sizzles
(As Natural Gas Cools, Trading Sizzles Research Paper)
As Natural Gas Cools, Trading Sizzles Research Paper. https://studentshare.org/macro-microeconomics/1449846-as-natural-gas-cools-trading-sizzles.
“As Natural Gas Cools, Trading Sizzles Research Paper”, n.d. https://studentshare.org/macro-microeconomics/1449846-as-natural-gas-cools-trading-sizzles.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF As Natural Gas Cools, Trading Sizzles

Commonsense Reasoning in and over Natural Language

The theories and theorems that are involved in quantifying language fail to provide us a limitless and potentially useable formula for quantification regardless of their complexity and their rationale supporting it.

Jon Barwise and John Etchemendy in Language Proof and Logic give a very understandable argument as to the reasons for quantifiers and the reasons they are not always accurate in their use. A very pertinent consideration for their argument starts out their ninth chapter in Language Proof and Logic by saying, “In English and other natural languages, basic sentences are made by combining noun phrases and verb phrases.” (1. Chapter 9 page 227, Language Proof and Logic.) The consideration continues fu...
11 Pages(2750 words)Literature review

History of Gas Prices and their Effect on the Economy

The relation of inflation within a society with the ever-changing oil and gas prices is pretty much significant and one must understand that there is a strong bond present between the two. This strong linkage allows for prices to shoot up whenever there is a sudden upward trend experienced in the oil and gas prices and whenever the gold rates have increased on the global front. With so much at stake and economies coming to a standstill with the uprising trend in the oil and gas prices on a global level, one can only expect problems coming to the fore of the common man and woman present on the street. The worst possible explanation given by experts in the field of oil and gas prices’ regimes is that these are done to benefit...
9 Pages(2250 words)Coursework

Provisions for Gas, Electricity, and Water Markets

...Gas, Electri and Water Competition Thirty years ago, the consensus was that network utilities, such as gas, electri and water were essentially natural monopolies where competition was neither feasible nor desirable therefore they were regarded as public sector. However the consensus has changed.Competition is generally seen to be possible and desirable in such utilities therefore regulators now have all primary duties to promote competition. From a regulator`s point of view, it is crucial to have a clear view of what a competitive market is and what can be done, in the real world, to establish the conditions that will allow such a market to emerge. Traditional vs. New Approach The traditional regulation relied on static concept...
9 Pages(2250 words)Report

Animals in Natural Disaster Settings: Hurricane Katrina

The first aspect of animal hurricane Katrina victims is domesticated pets that were not able to escape the storm with their owners, or their owners were killed during the hurricane. There were thousands of animals that died due to the catastrophic event. When the danger zones were being evacuated as the storm moved to the shore, civilians were instructed to leave their pets behind. After the storm’s end, rescue efforts began as many individuals were missing while it was presumed that some of the missing were injured and in need of being rescued.

Citizens returned to the chaos to retrieve what they could of their belongings and homes. Still, more rescue task forces assemble in hopes of saving any animals and pets i...
6 Pages(1500 words)Term Paper

Conflict between Natural Law and Man Made Law

...Antigone SOPHOCLE’S ANTIGONE Conflict between Natural Law and Man Made Law Order No: 249968 No. of pages: 6 Premium 6530 Antigone…..2 Abstract Sophocles, the great Greek dramatist, lived during the golden age of Greece, when art, literature and the humanities flourished. The plays of Sophocles are full of optimism and imbued with the spirit of classical Athens. His plays celebrate the superiority of humans, who are the crowning glory of God’s creation, and the master of their environment. But his plays seek to show that temperance of spirit in humans is must, and cautions against irrationality and wild emotions. His plays...
6 Pages(1500 words)Assignment

The Bhopal Gas Disaster

In the incident, a toxic gas called methyl isocyanate (MIC) weighing around 42 tonnes was released into a city with a population estimated at 500,000 people. The incident was devastating: the immediate death toll was 2,259 people. Generally, it is estimated that 8,000 people died in the first two weeks and more than 8,000 died later from gas-related complications. It is believed this is the worst industrial incident of the recent past.
The Union Carbide India was a company that produced carbonyl pesticide, which is an intermediate product of methyl isocyanate. The methyl isocyanate is a toxic material but cheaper compared to other raw materials that could have been used. However, the chemical involved in this incident was a c...
7 Pages(1750 words)Case Study

The Effects of Financial Crisis on Supplier Selection Criteria of the Oil and Gas Industry Equipment Market

It is a difficult task to find those vendors who not only have the adequate quality and quantity of the needed raw materials but who also have an attitude of efficiency and display commitment to customer service (Sonmat, 2006). Further, organizations also strive to locate and select vendors who can be depended upon for long term relationship.

The number of factors or attributes desired from the vendor is vast, and different organizations and different industries place different importance on the attributes (Sonmat, 2006). Some of the vendor attributes may gain importance owing to the nature of the industry, for example, in the case of consumer perishables suppliers, like fresh vegetables or fruits, the buying firm would...
20 Pages(5000 words)Literature review

Oil and Gas Exploration Prudent Development Through Environmental Awareness

... Act (CWA) regulates oil and gas facilities ensuring that oil and gas exploration companies protect water resources. Fresh water pollution is one of the most prominent issues affecting oil and gas exploration companies. There are numerous sources of fresh water pollution such as damage from produces water disposal and damage from underground storage tanks or pits (McAleese, 2000). Oil and gas companies also pollute fresh water resources through inappropriately plugged wells or unplugged wells. Most management practices control the disposal of wastes from oil and natural gas production. Moreover, the Bureau of Land Management (BLM) administers gas and oil development activities on federal and private lands on which the government retains...
7 Pages(1750 words)Literature review

The Trading Relationship between the US and China

China is now considered as the United States‘biggest source of import and its second-largest trading partner. Many US-based firms believe that in order to successfully operate globally, China is a critical country to tap. Thus, China has also become a $300 billion market for US businesses, including US exports to China and the sale of US firms’ offerings in China.
The strengthening of bilateral ties between the two economies has faced a number of complexities in recent times. Trade tensions have ensued majorly because of the slow and hesitant transition of the Chinese market into a free economy. Even though China has taken steps to improve its overall trade liberation, there is still a significant amount of polici...
7 Pages(1750 words)Assignment

Crude Oil Trading: Exxon Mobil Corporation

In the business environment, there are macro and micro factors that affect the running of the business. The macro factors are the eternal forces that affect the operations of the business while the internal factors are the internal forces that affect the operations of the business. Internal factors include the objectives, employees, management and the level of technology used in operation while external factors are level of competition, customers, legal factors, and political as well as socio-cultural factors. These factors can affect the business positively while at the same time they can affect the business negatively. All these factors are very ideal as they tend to make a business economically competitive. The essay investigat...
23 Pages(5750 words)Research Proposal
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Research Paper on topic As Natural Gas Cools, Trading Sizzles for FREE!

Contact Us