| There is a dynamic price relationship between | | | | to official figures, petroleum products can |
| oil and gas. Currently, natural oil prices | | | | replace about 18% of the gas usage. There |
| have a great impact in the fuel industry. | | | | are, on the other hand, the dual-fueled |
| Nevertheless, correlation between raw oil and | | | | devices that switch from one type of source |
| natural gas is necessary because they are not | | | | to the other. Although these are rare cases, |
| only complementary combustibles in | | | | there is a certain influence on the fuel |
| consumption, but also rivals, in fuel | | | | market. |
| production. Nevertheless, there are records | | | | |
| of periods when the two combustibles | | | | With regard to the other side, the supply, |
| presented separated evolutions. During this | | | | increases in crude oil prices generated by an |
| time interval, the natural gas prices raised | | | | increase in crude oil demand may lead to |
| above the crude oil prices. This is why | | | | price increase in natural gas. In this case, |
| analyses and forecasts of oil and gas became | | | | gas is identifiable as a co-product of oil. |
| necessary. | | | | This situation determines decrease in gas |
| | | | prices. Gas exists in nature as two basic |
| Economic evolution of oil and gas has | | | | configurations: associated and |
| depended greatly on demand and supply. Market | | | | non-associated. The associated type is |
| research proved that it happened for changes | | | | natural gas found in oil reservoirs in two |
| in the oil price to influence the natural gas | | | | forms: free or dissolved. The non-associated |
| price, but the converse never had a record. | | | | type does not enter in contact with |
| The relative dimension of each market has | | | | considerable amounts of oil. |
| explained this asymmetric relationship | | | | |
| between oil and gas price evolution. The | | | | Another connection between oil and gas |
| estimation of the price of the former occurs | | | | establishes when the increases in crude oil |
| at a global scale, while the estimation of | | | | prices generated by an increase in crude oil |
| the price of the later depends on regions. | | | | demand determine risen costs of gas |
| This means that the gas-segmented market is | | | | production and development. In this case, a |
| considerably smaller than the oil global | | | | certain amount of pressure develops at the |
| market. | | | | level of natural gas prices. There is a tight |
| | | | competition between oil and gas operators, |
| The economic factors of the oscillation have | | | | especially with concern to labor and drilling |
| not yet entered a definite pattern and | | | | rigs. More drilling and development means |
| scientists consider that there may be many | | | | more production and lower prices for both oil |
| other factors, some of them hidden behind | | | | and gas. Eventually, the influence is visible |
| appearances. What is steady is the influence | | | | upon the cash flow. |
| of the oil on the gas, while the inverse has | | | | |
| not been possible so far, and no forecasts | | | | We can see from the above analysis that there |
| stating this have occured. Increases in oil | | | | is a close price relationship between oil and |
| prices may have different consequences on the | | | | gas. The one that benefits of most of the |
| gas market. As far as the demand is | | | | influence is natural gas, which is currently |
| concerned, one must consider several points. | | | | the most preferred fuel in many of the |
| | | | domestic or industrial activities. |
| This increase of the raw oil price determines | | | | |
| consumers to prefer natural gas to petroleum, | | | | Such originally different fuels as oil and |
| which results in increasing the natural gas | | | | gas can enter in correlation from many points |
| demand and, implicitly, prices. Oil and gas | | | | of view. Nevertheless, to what concerns the |
| are competitive substitutes, especially in | | | | price, the natural gas prices seem to be the |
| the electric and industrial fields. According | | | | most influenced ones. |