Oil Price to Natural Gas Ratio
- Oil Price to Natural Gas Ratio
A mathematical ratio comparing the prices of crude oil and natural gas. In the oil price to natural gas ratio formula, the oil price is the numerator and the price of natural gas is the denominator. This ratio is used by energy analysts, traders and investors to gauge the market of oil versus that of natural gas.
The higher the oil price to natural gas ratio, the greater the demand for oil. For example, a ratio of 6:1 means that a barrel of crude oil costs six-times as much as an Mcf of natural gas. If the ratio declines, then difference in the prices of the two commodities is narrowing.
The trading strategy supported by this ratio is to long oil when the ratio is below its historic average, and long gas when the ratio is excessive compared to previous time periods.
Investment dictionary.
Academic.
2012.
Look at other dictionaries:
Natural gas — For other uses, see Natural gas (disambiguation). Natural gas extraction by countries in cubic meters per year. Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons[1] … Wikipedia
Natural gas vehicle — NGV redirects here. For the art gallery in Melbourne, Australia, see National Gallery of Victoria. Fueling (Fiat Multipla) … Wikipedia
Liquefied natural gas — Not to be confused with Natural Gas Liquids (NGL). Liquefied natural gas or LNG is natural gas (primarily methane, CH4) that has been converted to liquid form for ease of storage or transport. Liquefied natural gas takes up about 1/600th the… … Wikipedia
Oil shale extraction — is an industrial process in which kerogen mdash;a mixture of organic chemical compounds (including hydrocarbons) found in oil shale mdash;is converted into synthetic crude oil through pyrolysis. In pyrolysis, oil shale is heated in the absence of … Wikipedia
Oil shale economics — deals with the economic feasibility of oil shale extraction and processing. The economic feasibility of oil shale is highly dependent on the price of conventional oil, and the assumption that the price will remain at a certain level for some time … Wikipedia
Oil shale — For the scientific technical journal, see Oil Shale (journal). Not to be confused with Shale oil or Tight oil. Oil shale Sedimentary Rock Combustion of oil shale Composition … Wikipedia
Oil shale industry — Stuart oil shale pilot plant (now dismantled) Oil shale industry is an industry of mining and processing of oil shale a fine grained sedimentary rock, containing significant amounts of kerogen (a solid mixture of organic chemical compounds), from … Wikipedia
Oil well — The pumpjack, such as this one located south of Midland, Texas, is a common sight in West Texas. An oil well is a general term for any boring through the earth s surface that is designed to find and acquire petroleum oil hydrocarbons. Usually… … Wikipedia
Gas turbine — Microturbine redirects here. For turbines in electricity, see Small wind turbine. For turbines driven by the flow of gas, see Turbine. A typical axial flow gas turbine turbojet, the J85, sectioned for display. Flow is left to right, multistage… … Wikipedia
Oil reserves — Proven Oil Reserves, as published by the CIA Factbook, 2009 The total estimated amount of oil in an oil reservoir, including both producible and non producible oil, is called oil in place. However, because of reservoir characteristics and… … Wikipedia
