Colder-than-usual temperatures and record liquified natural gas exports are driving U.S. natural gas prices to hit their highest level in 14 years. According to Oilprice.com, the benchmark U.S. natural gas price rose by more than 7% on Monday morning to hit the highest level since the second half of 2008.
At 10:18 AM ET, the front-month futures price at the Henry Hub had leapt by 6.37% to $7.755 per million British thermal units, more than twice the price of the U.S. benchmark at the beginning of 2022. Last week, U.S. natural gas prices reached the highest close since 2008 at $7.3 .
“Below normal temperatures and strong exports driving the current tightness with stockpiles now almost 18% below the usual level,” Ole Hansen, head of commodity strategy at Saxo Bank, tweeted on Sunday.
NatGasWeather.com noted on Monday that immediate demand for natural gas in the U.S. should be strong from Monday through Wednesday, since the northern U.S. will be mild to cool as weather systems track through with rain and snow showers, and unseasonable lows in the 20s and 30s (F).
Investors looking to take advantage of these record high gas prices may want to consider Invesco’s energy-focused funds, including the Invesco DB Oil Fund (DBO), the Invesco Dynamic Energy Exploration & Production ETF (PXE), and the Invesco Dynamic Oil & Gas Services ETF (PXJ).
DBO provides an opportunity to get exposure to the current upside in oil prices. Additionally, investors don’t hold direct exposure to the heavy price volatility of holding positions directly in the commodity itself.
DBO seeks to track the DBIQ Optimum Yield Crude Oil Index Excess Return (DBIQ-OY CL ER), which is intended to reflect the changes in market value of crude oil. The single index commodity consists of light, sweet crude oil. The fund invests in futures contracts to track its corresponding index.
PXE, meanwhile, seeks to track the investment results of the Dynamic Energy Exploration & Production Intellidex Index. The fund invests at least 90% of its total assets in the securities that comprise the underlying index.
According to ETF Database, PXE “offers exposure to the exploration and production sub-sector of the domestic energy market, making it a potentially useful tool for those looking to target stocks of companies responsible for discovering and accessing new deposits of oil and gas.”
Finally, PXJ seeks to track the investment results of the Dynamic Oil Services Intellidex Index. The exchange traded fund generally will invest at least 90% of its total assets in the securities that comprise the underlying index.
The underlying index that PXJ tracks is composed of common stocks of U.S. companies that assist in the production, processing, and distribution of oil and gas.
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