Natural Gas Prices Increase 65% in 12 Months

Natural gas prices have been increasing over the past twelve months, rising from a low of below $2 per MMBtu in April, 2012 to over $3.50 per MMBtu this week.

The market is adjusting to key price factors, including:

1. Continued expansion and increased utilization of natural gas fired power plants creating high demand;
2. Natural gas fracking requires higher natural gas pricing to support capital investments based on expected returns.  Capital formation for fracking has gone flat due to low natural gas prices;
3. Plans to export natural gas (LNG) to higher cost European markets creates support for a higher price floor.

For more on the natural gas market, please see the following:

1. Market Realist article:   Rise in Natural Gas Prices on the Week is Short Term Positive for Nat Gas Names
2. Bloomberg Video: Jeffries' Eads Sees Natural Gas Rising to $5