馃馃徑 NATURAL GAS: THE HAND THAT ROCKS THE CRADLE 馃馃徑
Oil is used for many fuels (gas, diesel and kerosene) for transportation and other derivatives products, and it has been the reason for many wars [ https://t.co/tfkC6yO2oI ]. However, for industrial purposes, natural gas is the most important. Electricity is produced mainly with gas, and some other petrochemical and industrial process products.
If the top 20 producing gas countries are analyzed, some current wars might make sense [ https://t.co/XIF8wQh8zt & https://datos.enerdata.net/gas-natural/produccion-gas-natural-mundial.html ]. The area between Algeria, Egypt, Saudi Arabia, Iran, Azerbaijan, Turkmenistan, Qatar and the United Arab Emirates is key. In fact, part of many wars are over gas (among other reasons):
- The Israel-Palestine conflict is next to gas reserves in Gaza and Egypt [see: https://t.co/Y9pwW53RGX ]
- Do not touch Hamas leader in exile in Qatar because is pro-Western (country in the top 10)
- The Nagorno-Karabakh conflict is in the area between Iran and Azrebaijan
- The establishment of Iran as a great enemy of the Israel-USA binomial
- The eternal Western support for Saudi Arabia (major gas & oil producer)
- The Arab Spring began in Tunisia, Algeria's neighboring country (top 10)
- The conflict in Niger [see: https://t.co/gVePKpScsL ] , Nigeria's neighboring country (top 20)
For now, oil is closely watched and its current bull cycle may have incorporated these events. However, natural gas has yet to absorb the impact of the possible disruption of supply chains, and for the time being, industrialized countries are supplying themselves. This hypothesis would be logical considering the above, where conflicts converge in areas or borders of the main gas producers.
As can be seen, gas is more volatile than oil. The graph shows its price from 1990 to 2023, where there are ≈ 9 cycles; that is, there is 1 cycle every ≈ 3.6 years on average. In the sample, the highest were every ≈ 16 years. At least, an inflationary peak has corresponded to a cycle peak, so the sample could be significant.
Finally, if the past is extrapolated into the future, the next peaks could be in 2025, 2028, 2032, and the highest in 2038. This might make sense in face of the crash cycles [ https://t.co/rfvuugPyEZ & https://t.co/Ey9cgQAdWC ]. For the time being, the levels $2.66, $3.77, $4.7 and $6.6 USD are crucial for the next years. In 35 years, the pattern has been more or less stable, but, it might to change and turn into a super bullish cycle due to geopolitical tensions.
The best analysis is yours!
J. Joel Padilla
Copyright: Joel Padilla 2023
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