Natural gas is dirt cheap right now. While about 50 cents higher than it was three weeks ago, the $2.44 spot price is still close to 10-year lows. As our own Kevin McElroy has been saying for weeks, it’s a great time to invest in natural gas.
A new report out today offers further evidence for Kevin’s claim. According to the International Energy Agency, natural gas consumption could rise as much as 17% by 2017 as demand in the U.S. and China surges. China’s natural gas consumption is projected to double in the next five years, the agency claims.
The report estimates that worldwide natural gas consumption will grow by 576 billion cubic meters during that time, or an average annual increase of 2.7%. That’s similar to the demand growth over the last decade. However, technological advancements in shale gas extraction in recent years has been a major reason natural gas has become so cheap. Supply is simply outpacing demand.
Now natural gas demand should have a chance to play catch-up. If the International Energy Agency’s projections are correct, then natural-gas giants such as Chesapeake Energy (NYSE: CHK) and Exxon Mobil (NYSE: XOM) should stand to benefit over the next five years.