Increase In LNG Imports Is Creating More Pain For The Natural Gas ETF

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November 30, 2009 1:56pm ETF BASIC NEWS NYSE:UNG

natural-gas-bear“Just when you thought things couldn’t get worse for natural gas, a glut of global gas is starting to make its way to U.S. shores


. In a global natural gas report, Goldman Sachs says they expect LNG imports to grow 42% in 2010. See the highlighted area in red, below,” Vincent Fernando Reports From Business Insider.

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Goldman: We expect US LNG imports will increase in 2010, though we do not expect an “inundation.” For 2010, we expect US LNG imports to rise to about 1.7 Bcf/d from 1.2 Bcf/d, reflecting the increase in liquefaction capacity and greater exports of Russian gas to Europe. While this represents an increase, it does not represent the “inundation” of LNG for which others have argued.

“Whatever one may want to call it, 1.2 to 1.7 represents a 42% growth in imports. While imported gas is a tiny fraction of the U.S. market, such a sharp increase in imports will only prolong the pain for natural gas investors, such as those in the ETF United States Natural Gas (UNG), or investing indirectly through companies such as Chesapeake Energy (CHK),” Fernando Reports.

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The investment (UNG) seeks to replicate the performance, net of expenses, of natural gas. The trust will invest in futures contracts on natural gas traded on the NYMEX that is the near month contract to expire. It is nondiversified.

TOP 10 HOLDINGS ( 81.02% OF TOTAL ASSETS)  
 
Company Symbol % Assets
F/C Natural Gas Futr Nov09 N/A 19.1
F/C Natural Gas Futr Nov09 Ice N/A 16.8
F/C Natural Gas Swap Nov09 N/A 8.64
Fidelity Instl MM Fds Government I N/A 12.08
Goldman Sachs FS Government Sel N/A 11.38
Morgan Stanley Inst Liquidity Gov Inst N/A 2.07
Tr Swap Ng Commodity Index Long N/A 3.13
Usng Comm Swap 2/26/10 Long N/A 7.82

Chart for United States Natural Gas (UNG)

 

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