Natural Gas is in the Bull Run According to Warren Buffett

The rising global demand and lower production of U.S. Natural Gas set the stage for a bull market in Natural Gas in the medium to long term. Warren Buffett may have predicted this when he invested in the U.S. Natural Gas assets in the Summer of 2020. Last July, a Berkshire Hathaway affiliate bought all of the gas transmission and storage assets of Dominion Energy in a nearly $10 billion deal.

It was the first major acquisition for Hathaway since the beginning of the coronavirus pandemic and the biggest in four years. In the month following this deal, Berkshire announced the purchase of 5% in each of the five big trading companies of Japan. The deal was important as they are the key importers of energy into the country.

In Seeking Alpha, the vice president of EnergyFunders, Ross Hendricks, writes that Buffett is betting on the rise of demand. From today’s perspective, the energy bets on fossil fuels may be contrary to the ESG trend for divesting oil, gas, and coal. However, Buffett could be right with his bet on Natural Gas.

A recently unveiled investment of U.S. $4.1 billion in Chevron stock was another sign that Buffett does not see fossil fuels as doomed. These are signs that show Natural Gas is the fossil fuel with the highest growth potential in the coming years. The demand for global is set to recoup this year, with most of the demand lost during the pandemic. LNG Trade and demand will only improve over the next two decades.