Natural gas has been a long-time hopeful in vast world of energy commodities. It’s a futures commodity, and over the years it has seen slower growth than most spectators have desired. Nonetheless, ETF natural gas fund are still popular ‘till this day. With coal and oil always up in the air, the volatile market can be a real nuisance. Natural gas still holds-on to the dream, though!
Truth be told…:
· A savvy investor would invest not only in energy commodities (like natural gas), but in agriculture and metal commodities as well.
· Given the previous point, natural gas ETF’s typically make sound investments in practically anybody’s portfolio (Tony Hayward, anybody?).
· Previous trends in the energy commodities market (yes, I’m fully-aware that “trends” can’t be relied on) have generally dictated that when the price of crude oil and/or coal declines, the value of natural gas ETF’s rise.
· An even number of analysts (as contrasted with the other 50% or so of nay-sayers) predict that the consumption of natural gas could rise in lieu of future legislation that restricts the use of crude oil and, to a lesser extent, coal.
· Many utility companies that are situated in a region where extreme seasons (winter, summers, etc.) can usher-in extreme temps and conditions—many times the consumption of natural gas by them and homeowners alike make more sense than the alternatives.
With the recent Deepwater Horizon catastrophe in the Gulf, the uncertainty of crude oil is at an all-time high. It may not have a long-term detrimental effect on the market, but who knows. As far as natural gas ETFs, most analysts expect the market to be self-correcting because almost all natural gas finds and implementations are domestic.
Finally, the supply and demand laws that crude oil has seemingly eluded for a long time are starting to catch up to the big oil companies. Now could be the time to start considering alternatives.