What are Natural Gas Futures?

Natural gas-based paleontological remains are deposited underground for a long time, and gaseous hydrocarbons produced by slow transformation and metamorphic cracking are flammable and are often accompanied by crude oil mining in mining areas.

Basic knowledge of natural gas

Natural gas-based paleontological remains are deposited underground for a long time, and gaseous hydrocarbons produced by slow transformation and metamorphic cracking are flammable and are often accompanied by crude oil mining in the mining area.

Natural gas has many excellent characteristics and is one of the safer gases. It does not contain carbon monoxide and is lighter than air. Once leaked, it will spread upward immediately, and it is not easy to accumulate to form explosive gases. It has high safety. The use of natural gas as an energy source can reduce the use of coal and oil and greatly improve environmental pollution problems. Natural gas as a clean energy can reduce sulfur dioxide and dust emissions by nearly 100%, reduce carbon dioxide emissions by 60% and nitrogen oxides emissions by 50%, and help reduce the formation of acid rain, sooth the global greenhouse effect, and fundamentally improve Environmental Quality.

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Basic knowledge of natural gas

The cost of natural gas extraction is the basis for setting gas prices, and it includes upfront investment in exploration and development and production and operation costs. In general, the former is much higher than the latter. The natural gas industry has a large investment scale and a long cycle, and production lags behind exploration for a long time, ranging from three to five years, up to ten years, or even longer. Therefore, whether natural gas production enterprises can continue to invest and put into production depends first on whether gas prices can recover capital investment. Only if the price of gas is higher than the total cost of extraction, it is possible for the enterprise to recover the up-front investment and create benefits. Otherwise, enterprises will stop investing, stop production and wait for the opportunity. The Hugoton gas field in the United States was discovered in 1918. In view of the low gas price at that time, it has not been put into development. A typical example is the full development after a 30-year gas price adjustment.

Wang Bo believes that, in setting the price of natural gas, not only should it exceed the cost of extraction, but also profit factors should be considered. In the case of free competition, the average social profit should generally be obtained. The resource development industry is different from other production industries. With the progress of natural gas production, resources will show a decreasing trend, the difficulty of mining will increase, and the aging of equipment will require enterprises to invest a part of their profits to maintain simple reproduction and expand reproduction. Therefore, when analyzing and formulating the price of natural gas, foreign companies not only pay attention to the cost factor in the price, but also pay more attention to the most attractive factor of the excess profit in the price.

Operational costs of natural gas pipeline transportation

The operating cost of natural gas pipelines is an important part of gas prices. The long-distance pipeline is a New York pipeline that connects producers and users. The level of operating costs directly affects the price of natural gas at urban gate stations.

Natural Gas Basics Alternative Energy Prices

Natural gas is mainly used for fuel as an alternative energy source. It also has a mutual substitution effect with crude oil, refined oil, and coal. Because they belong to the same energy category, and there is overlap in the consumer industry, they are linked to alternative energy sources to maintain a reasonable price relationship. When the supply of these energy varieties is relatively stable, the parity basically maintains an interval oscillation, but when the output of one of the categories rises, it will break the balance. Crude oil, refined oil and electricity; as industrial raw materials, in the process of studying and setting the price of natural gas, from the perspective of world energy development, when the price of oil increases to a certain level, the price of natural gas will also rise to the corresponding level, and vice versa . The parity relationship between natural gas and other energy sources stimulates the development of natural gas and other energy industries, and stimulates the continuous change of the industrial structure of countries around the world. At present, users of the natural gas industry and some power generation users have the possibility of replacing oil products. Therefore, Wang Bo believes that when considering alternative energy sources, fuel oil should be taken first, and specific fuel oil can be analyzed and selected first.

Supply-demand relationship of natural gas basic knowledge market

Natural gas as a commodity, like other industrial products, its price changes with changes in supply and demand. The supply of natural gas is restricted by the natural gas reserves and capacity scale. When new natural gas reserves are discovered, production capacity can be expanded. Natural gas Supply capacity is likely to increase. Globally proven natural gas reserves exceed 6,500 trillion cubic feet. With the application of new exploration technologies to unconventional natural gas resources, the total reserves of natural gas resources may increase by 400 trillion cubic feet in the next few years. In recent years, the development of shale gas technology in the United States has led to a sharp increase in the production and reserves of shale gas. The shale gas has a reserve-production ratio of more than 100 years, which also makes it a future energy source.

The level of demand is closely related to economic growth. When the world economy is more prosperous, the demand for natural gas will increase accordingly, and the price of natural gas will rise. Conversely, when the world economy starts to decline or stagnates, the demand for natural gas will increase. A corresponding reduction will reduce its price. Winter is the season with the largest consumption of natural gas. If it encounters a cold winter, residents' heating gas will instantly increase the price of natural gas, as happened in the winter of 2013 to 2014. The consumption of natural gas in other seasons is relatively low. Corresponding to the off-peak season, natural gas inventory is an indicator that investors are watching closely, which is a reflection of both supply and demand. In general, if winter inventory is below the five-year average, gas prices will tend to remain strong during the winter.

National policy and tax policy on basic knowledge of natural gas

National price and tax policies are another important factor in setting gas prices. Energy is an important material foundation for the development of the world economy. Energy issues have always been strongly political and economic. As the proportion of natural gas in world energy consumption has increased year by year, countries around the world, especially natural gas producers, have paid more and more attention to the production, distribution and consumption of natural gas. In order to protect the interests of countries, many natural gas policies have been formulated. Among them, price and tax policies directly affect the formulation of natural gas prices. There are many other factors that affect the price of natural gas, such as the risk of gas field development, changes in world political situations, and so on.