Will The Flood Of LNG Imports Burdern The Natural Gas ETF?

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October 27, 2009 12:25pm ETF BASIC NEWS NYSE:UNG

lng-imports“The bad news seems to keep flowing for natural gas, not just in terms of near-term threats, but those farther out as well. The traditionally local U.S. natural gas


 market could be hit by a flood of imports this winter as new sources of overseas production ramp up,” Vincent Fernando Reports From Business Insider.

“This could be an example of how technological innovation (LNG transport) can hurt investors in gas plays such as the ETF United States Natural Gas (UNG). Even while helping consumers via cheaper gas of course,” Fernando Reports.

“The flood of LNG imports to the U.S. that some industry watchers had predicted over the summer never materialized, held back by low U.S. gas prices relative to Europe and delays in starting up overseas export facilities. But projects in Qatar, Yemen, Russia and Indonesia are starting to come online, just as colder weather in the U.S. is sparking greater heating demand for gas and the difference between U.S. and overseas prices narrows. While the onset of winter means record-high U.S. inventories of the fuel will soon start to be drawn down, the prospect of ready additional supplies over the horizon could limit price gains, even as demand rises,” WSJ Reports.

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