The price of natural gas rose by 1% in the past three weeks. Following this modest gain, the price remained close to $4. The latest development in the natural gas market also led United States Natural Gas (UNG) to shed 0.6% off its value during the last three weeks. Looking forward, how will the latest developments in the natural gas market impact UNG? Also, will natural gas remain close to $4?
During the past few week, UNG and natural gas prices didn’t do much, as indicated in the chart below.
The chart above presents the progress of UNG and natural gas during September and October (prices are normalized to the end of August).
As you can see, natural gas moved in an unclear trend in the past month. Also, UNG has underperformed natural gas by around 2%. This means, investors of UNG have lost around 2% more than investors of natural gas. The ongoing Contango in the natural gas futures market contributed to this gap between UNG and natural gas.
The rest of this analysis is at Seeking Alpha