Will Natural Gas Ever Fall?
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Ida Hansen
Will Natural Gas Ever Fall?
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United States Natural Gas (NYSE: UNG), the exchange traded fund for natural gas, is up double digits for the last week, month, quarter, six months, and year of market action (chart below).  For 2014, United States Natural Gas has risen by more than 30 percent.  Much of that has to do with the severe cold weather in the United States.   The colder it gets, the more natural gas is needed to heat homes and offices, especially in the Northeast.

But high prices for natural gas could be here to stay as global demand increases!

A previous article on this site reported on how poorly those investing in alternative energy were faring.  That is hardly the case with natural gas.  Fracking, a drilling technique, has made natural gas much cheaper to produce.  That has resulted in greater usage.  The many benefits of natural gas make it far superior to alternative energy such as wind power or solar.

The exchange traded fund for wind power, First Trust Global Wind Energy (NYSE: FAN), is down more than 3 percent for the last month of market action.

It is the same story with coal.  Market Vectors Coal (NYSE: KOL), the exchange traded fund for coal, if off by more than 30 percent for the last year of market action.  A recent article by The Wall Street Journal reported that coal is still used widely around the world.  But it is being replaced by natural gas it is a cleaner fuel.  Even China, the world’s largest user of coal, has vowed to try to reduce it reliance due to the damage it does to the environment.

For investors, United States Natural Gas continues to soar!

Eventually the weather will become more moderate in the United States.  But demand is increasing for natural gas.  In addition to providing electricity, it is also being used more for transportation.  That should provide a floor for natural gas prices.

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