As temperatures rise across the U.S. and Americans flip on air conditioning which makes a big draw on the electric grid, stocks of natural gas in storage are decreasing. Natgas is used to generate electricity. When there’s less supply to meet existing or growing demand, economics 101 tells us the price of the good or service (in this case natural gas) goes up. And indeed that’s exactly what’s happening. As the price of natgas increases, so too does the share price for M-U drillers.
As temperatures rise across the U.S. and Americans flip on air conditioning which makes a big draw on the electric grid, stocks of natural gas in storage are decreasing. Natgas is used to generate electricity. When there’s less supply to meet existing or growing demand, economics 101 tells us the price of the good or service (in this case natural gas) goes up. And indeed that’s exactly what’s happening. As the price of natgas increases, so too does the share price for M-U drillers.