Tags: Ross | Natural | Gas | Price

Wilbur Ross: Natural Gas Could Triple in Price Over Several Years

Wednesday, 16 May 2012 11:20 AM

Natural gas prices may be low today due to a supply glut but they're due to climb over the longer term, says noted investor Wilbur Ross, chairman and CEO of WL Ross and Co.

Natural gas futures are trading around $2.50 per million British thermal units, an industry metric, though demand will rise, and investors should get ready today for climbing prices tomorrow.

"We think that with the cut backs in production that are coming and the continued growth in demand, namely substitution of natural gas for coal, the outlook over several years is for a double or triple in price from where it is now," Ross tells CNBC.

Be sure to expect some bumps along the way.

"Squiggles in the next month or two aren’t very important to me," Ross adds.

Focusing on Ireland, Ross maintains his faith in the only English-speaking eurozone country.

The country took steps to improve its financial sector and while painful now, they will bear fruit down the road, as evidenced by Ross's decision to invest in the Bank of Ireland in 2011.

Don't view Europe as a whole, either.

"Nobody ever introduced himself to me as a European, they are separate individual countries. We think of it as country issues more than we do E.U. issues," Ross says

"Ireland is really a high-tech economy. It's no longer just the bucolic place that people once knew," Ross says, pointing to the country's pharmaceuticals and medical device industries, as well as Internet companies.

"It's a high-tech economy and has the lowest tax rate in Europe, a young, well-educated workforce and most importantly they dealt decisively with the problem," Ross says, referring to steps take to correct its financial woes.

"They knocked out 13 percent of the total cost of civil service and cut out capital spending and cut social services even in the face of 14.5 percent unemployment. They are much further along than the other countries."

Ireland today is feeling the heat from the Greek debt crisis.

Yields on the country's 10-year benchmark government bonds have spiked to 7 percent, a sign investors view the country as risky.

Ireland plans to return to international bond markets later this year but the Greek crisis may sidetrack those hopes.

"Greece's exit would ... be damaging to the euro and could have serious knock-on implications for Ireland," Ireland's Deputy Prime Minister Eamon Gilmore told journalists in Brussels, according to Reuters.

"The only sure thing that we know about Greece is that we are unsure about what's going to happen... what its future is and that is precisely the kind of uncertainty, insecurity and instability that we have to avoid. What the euro needs and what Ireland needs is stability."

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2012-20-16
Wednesday, 16 May 2012 11:20 AM
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