This is a note on United States Natural Gas Fund, or UNG, an ETF of nat gas futures that I recently added to my portfolio.
The only reason I am buying UNG is that the nat gas spot price is out of whack comparing to historical level.
The annual inventory level has been stable over the years, while fluctuating seasonally. The spot price, not inflation adjusted, was down to $2 during the 2001-02 recession, but quadrupled 1.5 years later. I thought it may happen again.
This is all I know about the U.S. nat gas market. It is admittedly a speculation, with the disadvantage of a contango in nat gas future.
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