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Oct
15
Tim Lambert
Is Copper Demand Bullish for Natural Gas Rising More?
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It has been a very good quarter for those investing in natural gas.

The main exchange traded fund for natural gas, United States Natural Gas (NYSE:  UNG), is up for the last week, month, and quarter of market action.  The last week has been especially strong, as the price is up almost 5%.  Good news from the copper (NYSE: JJC) sector could result in the UNG rising even more.

In a recent article in Bloomberg Businessweek, it was detailed how companies such as BHP Billiton (NYSE: BHP) are paying workers more as a result of greater demand.  Copper is needed for manufacturing and building.  When copper is rising, that is a sign that an economy is growing.

When an economy is expanding, so is the demand for natural gas.

Used for heating homes and offices, natural gas is a fuel rising in usage.  It has replaced coal (NYSE: KOL) as the power for many electric utilities.  Due to environmental concerns, natural gas should continue to supplant coal and other fuel sources.

As detailed in other articles on this site, the outlook for the energy sector in the United States is very bullish.

Other countries do not support the oil and natural gas sector, as does the United States.  The recent decision by the supreme court in France to uphold a ban on fracking is the latest proof.  Fracking is vital to the production of natural gas.

According to the US Energy Administration, global energy consumption is expected to increase by more than one-half between now and 2040.  Almost 90% of that demand will be in the developing nations.  The need for more natural gas and other fuels will be from growing economies, which will also result in more copper being used in manufacturing and construction.  What is bullish for copper is bullish for natural gas.

 

 



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