2013 Could Finally Be The Year for Natural Gas ETFs

U.S. Natural Gas Fund (NYSEArca: UNG) was launched in April 2007 and has lost money in every calendar year since then as the commodity’s price has stayed depressed on a supply glut.

However, 2013 could finally be the year that UNG and other natural gas ETFs end the rut. UNG capped a two-day rally with a gain of more than 4% on Friday.

Natural gas exchange traded funds could be moving past their bottom after a four year bear market in gas. Still, supply side strength could keep natural gas futures from breaking out.

On Wednesday, the Energy Department stated that weekly average output jumped to 7 million barrels a day in the week ended Jan. 4, a 20-year high and 1.16 million higher for the same week last year, reports Asjylyn Loder for Bloomberg.

Nevertheless, the long-term natural gas trend has been bearish, and more observers believe in a turnaround.
“We are hearing from various classes of investors that they are considering re-weighting gas in their portfolio allocation mix because 2012 may indeed have marked a price bottom,” Sal Gilbertie, president and co-founder of Teucrium, said in an interview.
Read More