For most of the year, one major player kept natural gas prices afloat in the face of a huge surplus: power generators.
The power makers went on a gas binge in 2012, turning their back on their stock-in-trade – coal – for the seductively priced commodity. Energy generators used an additional 4.2 billion cubic feet per day compared to 2011, a 22% increase.
However, I think because of the the great gas switchover which has siphoned off enough natural gas that the U.S. is no longer oversupplied for the first time in 18 months.
As power generators swap fuel sources again – reverting to coal – investors should look for a healthy spike in gas prices lasting into spring