Some of the Cheapest Energy on the Planet
Today’s chart is another look at the best energy bargain in the world… natural gas.
Regular DailyWealth readers know how new drilling technology has allowed us to access huge new supplies of domestic natural gas. This supply surge has pushed gas to bargain-basement levels.
Like its energy cousin oil, natural gas has many uses. It’s used as a building block to make chemicals, fertilizers, and plastics. It’s also used to fire power plants and heat homes and factories. And it’s becoming widely used as a motor fuel.
For a picture of how much of a bargain U.S. natural gas is, we need to look at the “Brent crude/natural gas ratio.” While most Americans only know our domestic “West Texas Intermediate” price, “Brent crude” is a better measure of what the rest of the world is paying for oil. Right now, Brent is surging in price… and folk are paying around $124 per barrel.
Rising Brent crude prices and falling natural gas prices have pushed the “Brent crude/natural gas ratio” to an extreme level. Years ago, this ratio drifted between six and 10. Sometimes, the ratio would even spike to 14, which indicated really cheap natural gas. In December, the ratio spiked to 35. But just recently, the ratio spiked to 47. Energy in the form of U.S. natural gas is ridiculously, absurdly cheap… which is why we’re going to start using a lot more in America.