With natural gas prices depressed due to oversupply, it’s only a matter of time before markets respond and natural gas starts to replace other more expensive power sources.
Or at least holders of the ETF United States Natural Gas (UNG) hope.
It should be heartening then that in England, where there is a glut of natural gas as in the U.S., utilities have indeed been making the switch.
Canada.com: According to a recent report by Reuters, electrical plants in the U.K. are increasingly relying on natural gas to generate the base load power instead of coal.
This is obviously being driven by the current surplus of natural gas, which has taken away the arbitrage opportunities and kept prices within a range that makes it economic to use the more environmentally friendly fuel.