Since the beginning of this year, the price for this fuel source has increased by almost 50% — though compared to crude oil, it’s positively cost-efficient and currently accounts for around 40% of the electricity generated in the U.S.

In December of 2005, natural gas reached its peak price of $15 per million BTUs (British Thermal Units). This was due to many factors including unusually high temperatures over that summer and the devastating hurricanes that marked that year.

New record highs for natural gas prices?

Prices are currently around $12 per million BTUs. But this year, a cold winter has already had an impact – reducing inventories by 16% compared to last year.

Adding to this, less LNG (liquid natural gas) imports are anticipated and NOAA, the National Oceanic and Atmospheric Administration, is predicting two to five major hurricanes with Categories of 3 or above this season.

This could mean major profits for investors and there are plenty of potential winning natural gas stocks out there.

My favorite is a small San-Diego-based supplier that is having a banner year…

My natural gas stock choice is Royale Energy Inc.

Royale Energy Inc. is experiencing 52-week highs daily but it still has a long way to go.

Operating as an independent oil and natural gas producer in the U.S., the company owns, operates and leases oil and gas interests in California, Texas, Utah, Oklahoma and Louisiana. It also engages in the developmental and exploratory drilling.

Don’t wait too long to make your move…

In March, the company announced that its oil and gas reserves were up 28% and rumor has it that they are expecting to confirm a significant reserve discovery in the next few weeks.

Happily, Royale Energy is no fly-by-night operation — it’s been around since 1986.

With a market cap of about $59 million this company has the potential — and the room — to grow.

In 2006, Fortune magazine named it one of America’s 100 top fastest growing small public companies – looks like they were right on target.

The stock price has already seen a 69% increase this year so you don’t want to wait to jump onboard for maximum gains.

If your looking for a winning natural gas stock, I recommend you buy shares of Royale Energy Inc. (ROYL:NASDAQ) at or under $9. I’m looking for (at least) a 20% increase in price by January 2009.

Source: Rising Oil Prices Good for Natural Gas Stocks

China, India and other nations that subsidize cheap petrol and diesel may be even less willing to raise prices than they were six months ago, aiding crude’s ascent toward $130 even as demand deteriorates elsewhere.

While Indonesia appears set to raise prices as soon as this week, the world’s fastest-growing oil users show little inclination to tackle their subsidy schemes, as fighting food-fueled inflation has become their top priority.

That’s bad news for oil consumers in the rest of the world, who face record crude costs partly as a result of demand growing unchecked in countries where pump prices have barely risen since the middle of 2006 — when crude was in the $70s.

Even as the fiscal burden of subsidies mounts with each new record high on the NYMEX, two things have changed in recent months to stay policymakers’ hands, for now.

The least harmful and most clean-burning fossil fuel, natural gas, is shooting up in price, too, says Justice Litle in Taipan Daily.

“The North American continent (both the U.S. and Canada) has been “running to stand still” for a long time now in terms of natural gas production. The rate at which new wells are coming on line is barely keeping pace with the depletion of old wells. And nor does it help that nuclear plants are looking a lot more expensive than first realized, or that natural gas and water are required in huge quantities to unlock the black treasure of Canada’s oil sands.

“As a result of these and other factors, the time has finally come for the liquid natural gas (LNG) market.”

There’s no doubt America has an energy problem… or maybe you could call it a fossil fuel problem. All the fuels we’ve relied on since time immemorial are skyrocketing in price. (Dinosaur bones just don’t take the old gas tank as far as they used to — as we personally discovered yesterday filling up at $4 a gallon here in NV.)

The least harmful and most clean-burning fossil fuel, natural gas, is shooting up in price, too. The North American continent (both the U.S. and Canada) has been “running to stand still” for a long time now in terms of natural gas production. The rate at which new wells are coming on line is barely keeping pace with the depletion of old wells. And nor does it help that nuclear plants are looking a lot more expensive than first realized, or that natural gas and water are required in huge quantities to unlock the black treasure of Canada’s oil sands.

As a result of these and other factors, the time has finally come for the liquid natural gas (LNG) market. The world desperately needs to be able to ferry natgas from one continent to another — like crude oil — and LNG technology is the way to do it. BreakAway Investor editor Andrew Mickey is right on top of this trend. Take a look.

Selling Out to the Highest Bidder (for Natural Gas)

by Andrew Mickey, Editor, BreakAway Investor

“We are not in the charity business. Whoever will give me the best price, I will follow him.”

- Abdullah bin Hamad al-Attiyah, Oil Minister of Qatar

Qatar is already taking advantage of this situation. And they’re making no qualms about their motivation: make as much money as possible.

But Qatar is just one small player in the next monster trend in the energy business. The situation is getting bad, real bad. The profit opportunity, however, is just as big as the situation is bad.

Already Exxon Mobil, Merrill Lynch, BHP Billiton, and dozens of others are getting in on the action. Now, as we put all the pieces of this complicated puzzle together, you can take your piece of the action, too.

Decades in the Making

For decades we’ve heard it’s coming — a completely new source of energy. But I’m not talking about some economically questionable alternative energy source or something with numbers that only “work” with lavish government subsidies. I’m talking about liquefied natural gas, or LNG.

The LNG market has been on the verge of a major breakout, seemingly for years. But the numbers just never made sense. It has taken years of infrastructure buildup to lay the foundation for the industry. And with oil companies required to shell out at least $5 billion just to build an LNG plant, they just weren’t going to take too big of a gamble.

That, however, is all rapidly changing.

Exxon Mobil, Merrill Lynch and China National Oil Company have combined to commit $30 billion to investing in new LNG facilities over the next five years. BHP has committed $25 billion for new LNG facilities in Australia. Worldwide, LNG investments are expected to eclipse $100 billion over the next decade. Warren Buffett, Shell, BP and Gazprom are all betting big on LNG.

Together, they’re all helping to nurse the LNG industry from infancy to maturity in short order. And with all these companies placing huge bets, you can bet they’re laying the foundation for a major win.

But the LNG market is still in its relative infancy. As a result, most investors just don’t understand all the details… yet. But that’s exactly what is creating an opportunity in the next big trend in energy.

We’ve got to understand three aspects of the booming LNG industry in order to profit from this situation. First, we’ve got to look at the basic nuts and bolts of the industry (how natural gas is turned into LNG and so forth). Second, we’ve got to realize natural gas will finally become a truly global commodity and the highest bidder will get the gas. Third, we’ve got to find the bottleneck — and who has is developing the solution. And that’s where we’ll put our money.

Natural Gas Goes Global

The United States has been getting natural gas on the cheap for decades. Most natural gas consumers (primarily power companies and utilities) have been paying very low prices for natural gas compared to the rest of the world. Despite the recent doubling in natural gas prices, U.S. utilities can still buy it for around $11 per million BTU (MMbtu).

The rest of the world is paying much higher prices. Spain pays $13 per MMBTU, Korea and India pay $14 per MMBTU, and Japan pays the highest price of about $15 per MMBTU.

The cause of the wide price range is pretty simple. Natural gas is produced and consumed locally. For instance, natural gas in the U.S. is produced from a well and transported via pipeline to the end-user.

Although there are some fairly long offshore pipelines, building a pipeline across the Pacific or Atlantic Oceans is technically and economically unfeasible. As a result, Asian, European, African, Australian and North American natural gas prices can vary widely. There was no way to trade natural gas on a global level.

The growth of the LNG industry is already starting to change all that. Japan recently paid $19 per MMBTU of LNG and China and Europe are also paying top dollar for LNG. But they’re happy to do it. The price may seem high now, but the long-term LNG contracts these countries have signed will save them a lot more money as natural gas prices continue to rise over the long term.

There is no transparent market for LNG. The LNG market is made up of privately negotiated contracts between suppliers and consumers. That lack of transparency is helping to keep this boom quiet for the time being.