An ETF to Watch as Natural Gas Prices Hit Milestone

Through the week of April 12, traders have been placing more bullish bets on natural gas, according to OilPrice.com. Rising inflation could also be fueling these bullish bets as higher natural gas prices continue through 2022, which can offer an ideal hedge.

“The benchmark U.S. natural gas price soared by more than 7% early on Monday to hit the highest level since the second half of 2008, as Europe races to buy non-Russian gas after Putin’s invasion of Ukraine,” reports OilPrice.com.

Of course, the expectation of colder weather can also sway prices to the upside for natural gas.

“Below normal temperatures and strong exports driving the current tightness with stockpiles now almost 18% below the usual level,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Long-term investors or short-term traders can look to the First Trust Natural Gas ETF (FCG C+) as one way to play rising natural gas prices. FCG, which tracks the ISE-Revere Natural Gas Index, is up close to 60% year-to-date.

Additionally that stellar performance is being accrued with stocks because FCG is an equity-based, not a futures-based, exchange traded fund. More upside could be on the way for FCG due to the tight supplies amid higher demand and colder weather.

“In another bullish factor for natural gas prices, immediate demand in the United States is expected to be strong Monday through Wednesday, as chilly late-season weather systems track across the Midwest and Northeast with rain and snow showers, as well as cooler than normal lows of 20s and 30s, NatGasWeather.com noted on Monday,” OilPrice.com adds.

For more news, information, and strategy, visit the Nasdaq Investment Intelligence Channel.