Few are coming out ahead in the BP (NYSE: BP) oil disaster, but natural gas has emerged as one. As a result, the United States Natural Gas ETF (NYSEArca:UNG) has seen heavy upward momentum in the last two weeks.
UNG is up more than 12% in the last two weeks. ETF Daily News reports that UNG often moves independent of the stock market, a plus in these uncertain times for stocks. [7 Commodity ETFs You Should Understand.]
The rapidly improving sentiment toward natural gas stems from a few things:
- It’s favorable as a political issue. For environmentalists, it emits less carbon than oil and coal, and after the BP disaster, it’s a plus that gas is mainly obtained via land drilling and not offshore drilling. Natural gas also continues to be far cheaper than oil. [A New Trend for Natural Gas ETFs?]
- A hot summer is in the forecast, which would increase demand.
- It’s hurricane season, too; any big hurricanes have the potential to interrupt production and therefore increase prices. [What Hurricane Season Means for Natural Gas ETFs.]
For more stories about natural gas, visit our natural gas category.
- United States Natural Gas ETF (NYSEArca:UNG)
- First Trust ISE-Revere Natural Gas Index (NYSEArca:FCG)
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.