How do i invest in fracking

Investing Best Accounts. Stock Market Basics. Stock Market. Industries to Invest In. Getting Started. Planning for Retirement. Retired: What Now? Personal Finance. Credit Cards. About Us. Who Is the Motley Fool? Fool Podcasts. For anyone wanting to play in the fracking space, oil prices are going to be a factor. Natural gas and oil are different markets, in the sense that oil is basically global and natural gas is more localized.

The extraction of natural gas, though, tends to track oil production because the types of rock that produce natural gas also happen to be the ones that carry oil. Historically, a lot of natural gas production is a byproduct of oil production. Areas such as the Marcellus Shale in the eastern U. However, a sizable portion of new production sites are also in Texas or North Dakota, says Bianchi.

That's changing — in the future, there are likely to be more "pure" gas plays as the technology develops for getting gas out where oil isn't worth it. But for now, it's a good rule of thumb that as oil production rises, so does natural gas.

The converse is also true. Another factor to consider in investing in fracking infrastructure is exporting natural gas. In , the U. That's the highest on record; in fact, the trendline has been steeply rising since , when the U.

Almost all of it leaves the country via pipeline to Canada and Mexico. The wild card in this is Europe and Japan. To be sent to either place, natural gas has to be liquefied, which costs a significant sum to make economic sense.

The price of natural gas has to stay relatively high in Europe and Asia while staying low enough in the domestic market that it isn't simply more profitable to sell it here. It's possible the European Union may want to reduce its dependence on Russian natural gas, but as Russia already has the infrastructure in place to deliver it, prices would have to be high in order for imported gas to be competitive, unless there is a political decision to stop importing Russian gas.

With a low barrier to entry, the amount of competition to drill for and extract oil and gas via fracking tends to keep profits down — not to mention the relatively low price for gas. Assuming that, the companies that provide the implements and services to frackers could be the better bet.

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