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United States Natural Gas ETF Message Board

  • joelm_shapiro joelm_shapiro Dec 28, 2012 8:15 AM Flag

    What about 5-year average demand?

    Everybody talks about stocks being higher than the 5-year average supply, but demand is above the 5-year average too. So is the market really oversupplied? Assuming a compound annual growth rate of 2-3%, demand is probably 5-6% higher than the 5-year average too. With supply about 10% higher than the 5-year average, excess inventory is probably only about 175 BCF. That can be wiped out in a couple of bad weeks like we're having now.

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    • Using the 5-year average or mean as the comparison makes little sense to me. Every year more homes are built, new industrial demand, etc... - its just GDP growth and inflation.

      Maybe a better comparison would be the 5 year average and mean, but correct for the past 3 years of GDP growth(so multiply by 6-9%). I look at YOY numbers, but I understand since NG is soo volatile that other measures may be more appropriate. I am looking for NG to be above $4 in 2013 as new demand is created from these relative low prices compared to alternatives.

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