Natural gas prices could fall dramatically because supply is so strong in the market that demand cannot keep up, according to Torsten Dennin, managing director at Natural Resources.
Prices halved to just above $2 per million British thermal units (mmBTU) in a year amid a glut of supply and mild winter weather in Western Europe and the U.S.
“It [the natural gas price] will probably go to below $2, maybe between $1-2 in the next 12 months,” Dennin told CNBC in an interview.
For investors wanting to enter the agriculture sector, Dennin warned that year-to-date it had been an underperformer and there were probably better opportunities in the stock markets, because of the impact of a slowdown in China and the ongoing financial turbulence.
“If you compare the last two financial crises, the commodity complex is not a defensive sector because of the price,” he said.
However, grain markets look quite healthy because of relative cheap prices, according to Dennin.
In terms of the uranium market, Dennin said he thought we were in the middle of a fundamental shift for the next five to 10 years. This again came down to supply and demand issues. However, despite Germany shutting down its nuclear facilities, nuclear energy on a global basis was growing at a wide pace.
“China is building a nuclear reactor every quarter up from 2014-2015. This challenges the supply-demand basis,” Dennin said.
Uranium he added, was a long-term commodity story and not an investment for those wanting to buy and sell the next day.