After being declared one of the worst investments of the last few years, natural gas seemed to finally find its footing in 2012. The fossil fuel surged through the end of summer, marking a 70% jump in just a few short months, only to watch its price cool back down during August. From there, it has been nothing short of a roller coaster ride for this asset and its traders, as NG has been all over the place in the last two months [for more natural gas news and analysis subscribe to our free newsletter].
The United State Natural Gas Fund (UNG) has been one of the most popular ETFs in the past few years, as investors have been using this product to make a play on the volatile world of natural gas. But for all of its popularity UNG has gained a reputation as one of the most hated funds in the industry [for more natural gas news and analysis subscribe to our free newsletter].
Natural gas is one of the more volatile commodities, allowing investors to bring home serious gains, but also serious losses. It has become a trading favorite thanks to its violent price swings and its paradoxical habit of being consistently inconsistent. With weekly supply reports from the EIA as well as constant investor speculation over future energy uses, it is no surprise to see this asset class surge in such high popularity for the brave investor. But with natural gas futures being a bit too complex and dangerous for the average joe, many have turned to the United States Natural Gas Fund LP (UNG) for their exposure to this coveted trading asset [for more natural gas news and analysis subscribe to our free newsletter].
Natural gas took a major blow in trading today as the fossil fuel lobbed off more than 3.5%. The unexpected drop came as new sanctions from the EU officially banned natural gas imports from Iran. The move comes as European nations are “trying to increase pressure on Iran to cooperate in talks regarding its nuclear program” writes Associated Press. This comes in a long line of efforts by numerous nations to force Iran into cooperation regarding its nuclear program, an issue that the country seems to have no intentions of addressing [for more natural gas news and analysis subscribe to our free newsletter].
Natural gas continues its bullish trend, as the fossil fuel looks to shake off the crushing losses that the last four years have brought. Thanks to the hottest summer in U.S. history and a spike in demand for this vital energy source, NG was able to rally for the better part of 2012, though it still remains negative for the year. But after many watched this commodity suffer a pullback in August, many thought it was heading to its old ways of consistent losses. Instead, NG turned it on in September and has been up roughly 20% in the trailing four week period [for more natural gas news and analysis subscribe to our free newsletter].
After a punishing four year run, it looks as though natural gas futures may be ready to cross into the black for 2012. NG had been a very popular short for many investors since 2008, as its price cratered following the recession. Abundant resources and improved technology were among the culprits that turned natural gas into one of the cheapest fossil fuels around. That negative momentum carried through into 2012, but was stopped short as NG was determined to finish the year on a strong note [for more natural gas news and analysis subscribe to our free newsletter].
Although natural gas is arguably one of the most frustrating commodities on the market, trading the fossil fuel has surged in popularity in recent years. Natural gas’s inherent volatility combined with its healthy trading volume has made it quite an enticing investment tool for those investors looking for potentially lucrative returns. Natural gas is also known for being “greener” than its other fossil fuel cousins, like coal and oil, since it is relatively cleaner and produces less greenhouse gas emissions. And thanks to the rapid development of the exchange-traded fund industry, investors now have several ways to gain access to one of the most popular commodities [for more natural gas news and analysis subscribe to our free newsletter].
Few commodities have been in the news as much as natural gas has in 2012. After an abysmal multi-year run, NG seemed to have no momentum behind it and most investors had given up hope. But earlier in this year saw some much needed relief for the fossil fuel as temperatures across the nation were hotter than normal, spiking demand for NG. Ever since, natural gas and its related investment securities have been on a tear, with the commodity itself tacking on 70% in the last three months alone [for more natural gas news subscribe to our free newsletter].
At this point, there isn’t anything new to say about natural gas. Its massive decline has been well documented and it seems that most of the investing world has temporarily lost hope that NG will recover anytime soon. While it is true that recent losses have been attributed to an unseasonably warm winter as well as growing supply, natural gas has been on a slippery slope since the recession began. But despite its losses, it is also widely agreed that this commodity will play an increasing role in out world’s future energy supply, as the fossil fuel is being utilized in a number of new mediums [see also 25 Ways To Invest In Natural Gas].