Natural Gas is a Bargain

As of June 2013, natural gas was trading at $3.85 a million British thermal units; roughly double the price of its lowest trading price in April 2012. At a price of just under $4, oil trades for 23 times that of natural gas against an energy-equivalent ratio of just six. Phrased another way, if oil trades at $90 a barrel, the equivalent amount of energy from natural gas would be trading at $15 (not $4), the 1-to-6 ratio. Using this ratio alone, natural gas is a great bargain. Moreover, according to The Wall Street Journal, natural gas prices are projected to reach $4.22 in 2014 and $5 by 2018.