Tuesday, September 8, 2009

Portfolio Notes: UNG – Speculative Buy

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.

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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.

http://icecurtain.blogspot.com/

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