Entry Point for Natural Gas Equities On Horizon
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Natural gas futures, traded heavily through ETF United States Natural Gas (NYSE: UNG), are posting 2 month highs, surging 3 percent intra-day and adding to gains on the week.
Thursday's storage report should show lowered inventory, as supply gluts that have sent the price of natural gas to 10 year lows begin to ease. Natural gas prices have decoupled from other energy futures such as crude which has been under pressure this month.
Analyst worry that the rise in natural gas price could hit a ceiling soon, assuming prices rise to levels where coal starts to become attractive again
Barclays' analyst Grant Hofer thinks there may be an attractive opportunity to step into natural gas biased equities over the next new months.
"The gas names could represent an attractive trading opportunity over the balance of this year," said Hofer, and he sees a possible entry point opening up later this year.
Traders can take advantage of equities in the natural gas space by playing the First Trust ISE-Revere Natural Gas ETF (NYSE: FCG) which tracks stocks in the space. The ETF is down 17 percent year-to-date.
Thursday's storage report should show lowered inventory, as supply gluts that have sent the price of natural gas to 10 year lows begin to ease. Natural gas prices have decoupled from other energy futures such as crude which has been under pressure this month.
Analyst worry that the rise in natural gas price could hit a ceiling soon, assuming prices rise to levels where coal starts to become attractive again
Barclays' analyst Grant Hofer thinks there may be an attractive opportunity to step into natural gas biased equities over the next new months.
"The gas names could represent an attractive trading opportunity over the balance of this year," said Hofer, and he sees a possible entry point opening up later this year.
Traders can take advantage of equities in the natural gas space by playing the First Trust ISE-Revere Natural Gas ETF (NYSE: FCG) which tracks stocks in the space. The ETF is down 17 percent year-to-date.
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