Natural gas futures climbed Wednesday as traders squared their books ahead of the June contract expiration. Natural gas for June delivery on the New York Mercantile Exchange was trading 7.9 cents higher, or 1.95%, at $4.13 a million British thermal units after opening 9.8 cents higher at $4.149/MMBtu. 

Book-squaring lifted the market Wednesday as traders bought back previously sold contracts to cover their positions before the June futures contract expiration at the end of the trading session. Futures were also supported by strong market resistance at the $4.00/MMBtu level. Several attempts to move significantly below that level in recent weeks have failed, indicating that gas futures are poised to move higher, said Mike Rose, the director of energy trading for Angus Jackson Inc. 

“I think we’re going to trade at the top of the recent [price] range, and we’re probably going to poke our heads through there and try to give the market a new high,” Rose said. 

Gas futures were also taking cues from crude oil and equities, which rose on a report that U.S. durable goods orders were higher than expected last month. Gas traders have eyed economic data closely for signs of a recovery that would boost energy demand. 

Warm weather forecasts were another supportive factor for gas prices on Wednesday. Hot late-spring weather in the major gas-consuming regions was expected to drive demand for natural gas to generate electricity for air conditioning. MDA EarthSat, a Rockville, Md. private forecaster, was predicting warmer-than normal temperatures across much of the eastern and southern U.S. from May 31 to June 4. From June 5 to June 9, MDA was expecting above-normal temperatures in the central U.S., West and parts of New England and the Great Lakes region. 

“While it is not as warm in much of the nation as the week ending on Thursday, it’s still warm overall the next 2-3 weeks for most of the nation from the Plains eastward,” wrote Joe Bastardi, a senior meteorologist with AccuWeather.com, in a note to clients Wednesday. 

Gas supplies remain abundant as producers continue to drill in prolific rock formations called shales, however. Total gas in U.S. storage as of May 14 was 2.165 trillion cubic feet, about 16.6% above the five-year average for the same week and 3.5% above last year’s level for that week. 

-By Christine Buurma, Dow Jones Newswires; 212-416-2143; christine.buurma@dowjones.com 

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As a result of the report the United States Natural Gas ETF (NYSE:UNG) was up about 3% in today’s trading.  The  Natural Gas ETF (NYSE:UNG) has been able to base for the last month or so, with a range between $6.50 and $7.50, therefore a breakout above the 50 day moving average could put the UNG on breakout territory, and probably sparking a good momentum move. 

ETFs offer an easy way to play Natural Gas and there are many options available besides the most popular US Natural Gas ETF (NYSE: UNG).  We have listed some options for investors to look at and compare to one another below.  Note that we have listed some industry related ETFs as well as direct Natural Gas exposure plays excluding any leveraged ETFs.        

United States Natural Gas Fund (NYSE:UNG)          

The United States Natural Gas Fund, LP (NYSE:UNG) is a new way for investors and hedgers to manage their exposure to energy. The United States Natural Gas Fund LP (NYSE: UNG) is an exchange traded security that is designed to track in percentage terms the movements of natural gas prices. UNG issues units that may be purchased and sold on the NYSE Arca. The investment objective of UNG is for the changes in percentage terms of the units’ net asset value to reflect the changes in percentage terms of the price of natural gas delivered at the Henry Hub, Louisiana, as measured by the changes in the price of the futures contract on natural gas traded on the New York Mercantile Exchange that is the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire, less UNG’s expenses.          

United States 12 Month Natural Gas (NYSE:UNL)          

The investment seeks to reflect the changes, net of expenses, of the spot price of natural gas delivered at the Henry Hub, Louisiana, as measured by the changes in the average of the prices of 12 futures contracts on natural gas traded on the NYMEX. The fund will consist of the near month contact to expire and the contracts for the following eleven months, for a total of 12 consecutive months contracts, except when the near month contract is within two weeks of expiration, in which case it will be measured by the futures contract that is the next month contract to expire and the contracts for the following eleven consecutive months.          

iPath DJ-UBS Natural Gas TR Sub-Idx ETN (NYSE:GAZ)          

The investment seeks results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones-UBS Natural Gas Total Return Sub-Index. The note is designed to reflect the performance of natural gas. The index is composed of the Henry Hub Natural Gas futures contract traded on the New York Mercantile Exchange.          

First Trust ISE-Revere Natural Gas Idx (NYSE:FCG)          

The investment seeks to replicate, net of expenses, the ISE-REVERE Natural Gas index. The fund invests at least 90% of assets in common stocks that comprise the index. The index is an equal-weighted index that consists of exchange-listed companies that derive a substantial portion of their revenue from the exploration and production of natural gas. The fund is nondiversified.          

iShares Dow Jones US Oil Equipment Index (NYSE:IEZ)          

The investment seeks results that correspond generally to the price and yield performance of the Dow Jones U.S. Select Oil Equipment & Services index. The fund generally invests at least 90% of assets in securities of the Underlying index and depositary receipts representing securities of the Underlying index. It may invest the remainder of assets in securities not included in the Underlying index but which BGFA believes will help the fund track Underlying index, and in futures contracts, options on futures contracts, options and swaps as well as cash and cash equivalents, including shares of money market funds advised by BGFA. It is nondiversified.          

Jefferies | TR/J CRB Wildcatters Exploration & Production Equity ETF (NYSE:WCAT)          

The investment seeks investment results that replicate as closely as possible, before fees and expenses, the price and yield performance of the Thomson Reuters/Jefferies CRB Wildcatters Energy E&P Equity index. The fund normally invests at least 80% of total assets in the equity securities that comprise the underlying index and depositary receipts based on the securities in index. The index is designed to track the overall performance of a universe of listed U.S. and Canadian small and mid-capitalization companies engaged in the exploration and production of oil and natural gas. The fund is nondiversified.

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