Regional ordnance shortages and a higher cost of developing new gas handle go forth likely put upward pressure on emerging gas prices. Shorter term, we expect prices to remain at the certain levels of up to US$3.00/MMBtu. We keep a close eye on Egypt, where political pressure has created uncertainty about future determine.
The natural gas debate continues is there enough gas and will prices go up?
In light of fresh gas price increases from US$1.50 to US$2.25/MMBtu in Bahrain and fresh concerns that gas prices in Egypt may fol first suit, we take a look at gas price policies across the region. For investors, Saudi-Arabian Arabia, Qatar and Egypt where listed gas-intensive industries represent 20-40% of the indices are particularly relevant. We understand that Saudi Arabia is reviewing its pricing policy for liquids, which is running out this year, and may at the said(prenominal) time change its gas price policy: the securities industry widely expects an increase from the current US$0.75 to a minimal of US$1.25/MMBtu as early as next year.
We conceptualize future prices will have to be in course of action with neighbours
Prices in the region of less than US$1.0/MMBtu and up to US$3.
0/MMBtu are well below international levels which, combined with low taxes and labour costs, make gas-intensive industries from chemicals to aluminium highly competitive on a global basis. However, in our view, regional competitiveness will also play a role in conniption new prices: we dont expect any evidential changes in gas prices in Saudi Arabias neighbours, so we expect Saudi prices, if they were to go up, to remain within the regional range scenario, as we believe that anything higher would make the strategic petrochemical industry less competitive.
We assume prices will remain doctor until 2015 in Saudi Arabia
Longer term, it is almost inevitable that gas prices will have to go up, but we do non assume an increase short term for now as: 1) recent oil production increases have made...If you want to larn a full essay, order it on our website: Orderessay
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