Natural gas prices and its dependence on natural gas reserves

Abstract

The gas is one of the most important energy resources in the world. This fossil fuel belongs to the exhaustible and nonrenewable energy sources. Compared to oil reserves, gas reserves are sufficient however in the near future it is expected to achieve peak of mining and afterwards its decline until all stocks are exhausted. Decreasing supply will be probably linked to rising gas prices. The aim of this paper is to determine the dependency rate of natural gas prices on their reserves and to predict the future development based on historical price data of reserves and average gas prices. Firstly in article is analyzed gas mining sector using the SWOT analysis and analysis of supply and demand for gas. On the supply side we are defining states with the largest gas reserves and the size of the global proven gas reserves. On the demand side we are analyzed the largest consumers of natural gas. Furthermore, it is examined the dependence between two quantitative variables using correlation analysis (average price of natural gas and proven reserves of gas in each year since 1984). Using polynomials is predicted the price that is based on the historical development of the above variables. Finally, the comparison of results with analyzes of world-renowned institutions is realized.