oil price to natural gas ratio

Definition

A mathematical formula that relates the price of crude oil to the price of natural gas. The price of crude oil serves as the numerator, and the price of natural gas serves as the denominator. If the ratio is high, 6:1 for example, means that there is a high demand for oil, and if, on the contrary, is low (2:1) represents the price differential between the two resources is lower. The ratio is used by analysts to assess supply and demand changes in these two resources.
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