The most discussed subject in the energy industry is what the price of oil will be. We can make educated guesses by looking at fluctuations in the prices of oil, gold, and natural gas over the past seventy years. This relationship was discovered by R. David Ranson, the President and Director of Research at HCWE Inc., who discussed his research with Jacki Daily on the latest "Jacki Daily Show."
The value of the dollar is also a vital component in the pricing of these resources. When the United States was on the gold standard, energy prices were stable. Upon abandoning it, prices began to fluctuate, even though the U.S. dollar is a relatively stable currency. He said the dollar is deemed a convenient unit while it maintains supremacy.
Natural gas' relationship is not quite as close as gold and oil because it's historically been found all over the world, and not traded globally as a commodity in the same way. Liquid natural gas has changed all that, as it can be shipped everywhere. Ranson thinks it will also sync with the rise and fall of gold prices and be driven in part by risk tolerance.
He believes the prices will continue to be influenced by natural forces like arbitrage instead of government interference. Arbitrage is the practice of taking advantage of currencies to buy something for less and sell it immediately at a profit.
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