Oil prices and gas prices

By Michael

[This is a comment on a prior post – John M.]

I agree with Tom (original post and response here) that natural gas and oil prices have been decoupled for some time. Indeed, it is remarkable how decoupled energy feedstocks are from each other. This highlights how oil really is the best example of a true global commodity, given the relative ease at which it can be transported and stored (compared to other energy commodities like natural gas and electricity). Prices differences also highlight the costs associated with converting one form of energy to another. The graphs below highlight current price difference among different commodity feedstocks normalized on a $/BTU basis.

Source: Capital IQ (Note Electricity is at peak rates).

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About macomberjohnd

HBS Finance faculty interested in sustainability in the built environment including devices, structures, townships, and cities.

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