Ratio of Oil to Gas Prices Breaks Above 19-Year High

The ratio of crude oil to natural gas futures prices on the New York Mercantile Exchange reached its highest level in over 19 years during today's trading session.

Crude oil prices at the NYMEX crossed above $74 per barrel this morning, trading at their highest level in 2009. In comparison, Natural gas prices are slighly up this morning, after closing yesterday at their lowest since August 14, 2002. At the current levels, the ratio between both commodities stands at 25 to 1.

  • Looking at data going back to early April 1990, the average ratio of crude oil to natural gas futures prices stands at 9.38
  • Earlier in the session today, this ratio hit as high as 25
  • This ratio is now at its highest level in over 19 years

The divergence of these energy commodities has some investors forecasting that a price correction could be in place. Indeed, the average price for natural gas in the past twelve months was at $6.986 / million BTU, while the average price for crude oil over the same period stood at $61.94 / per barrel. The five year averages for the two are $7.394 and $69.55, respectively. If both commodities were to move to their averages, natural gas will have a significant move. Here are some companies that could benefit from a rebound in natural gas prices:

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