Just look at what's happening in the energy markets right now ...
Iran is cutting off shipments to some of its biggest European customers — just out of spite for the nuclear technology dispute. Who will get dragged into this squabble next?
Furthermore — and I bet you've noticed — it's costing more to top off your car's gas tank these days. We're almost back to the 2008 "super-spike" gasoline prices in some parts of the U.S.
The headlines simply prove Sean's point: Natural gas is set to be the next big energy boom. It's much more efficient than crude oil in many cases ... and the U.S. has its own ample supply. We don't have to depend on imports.
|Relying on imported energy is getting riskier.|
Why natural gas now and not a year ago? Because the situation has changed. Natural gas is relatively cheap, and the technology to produce more of it is developing quickly. The number of investor-friendly ways to get involved is exploding, too. You'll be hearing about some great profit plays from Sean.
For my part, I'm watching some natural gas-related ETFs. And I see opportunities in three specific areas ...
Opportunity #1: Natural Gas ETFs and ETNs
Not so long ago, the only way for an individual investor to get direct exposure to natural gas prices was through the futures market. This is complex and impractical for most people — even without the massive leverage.
As with so many other sectors, the ETF revolution brought a big change. Now several ETFs and exchange-traded notes allow you to participate in the global energy markets much more easily.
These have some drawbacks, though. Many commodity ETFs and ETNs still have very low volume. Some are even on my Deathwatch list.
Another problem is that futures markets, by their nature, are hard to track with any precision over the long-term. To learn why, see "What's All This Talk About Oil Futures and Contango?" The same applies for natural gas.
Yet another challenge: Complex instruments like these draw a lot of legal scrutiny, especially when they are new and unproven.Regulators have occasionally created roadblocks for commodity-based energy ETFs and ETNs.
Nevertheless, if you want to capitalize on quick moves in natural gas prices, take a look at these tickers:
- iPath DJ-UBS Natural Gas Total Return ETN (GAZ)
- iPath Seasonal Natural Gas ETN (DCNG)
- Teucrium Natural Gas Fund (NAGS)
- UBS ETRACS Natural Gas Futures Contango ETN (GASZ)
- United States 12 Month Natural Gas Fund (UNL)
- United States Natural Gas Fund LP (UNG)
- ProShares Ultra DJ-UBS Natural Gas (BOIL)
- ProShares UltraShort DJ-UBS Natural Gas (KOLD)
Opportunity #2: Pipeline Profits
|Natural gas travels by pipe.|
As you know, natural gas doesn't just appear out of nowhere. It's a useless resource if it can't get from the ground to your furnace.
Gas pipelines solve this problem nicely. They're a big business — and if Sean is right they're going to get bigger!
For tax reasons, energy pipelines are typically owned by "master limited partnerships," or MLPs. As I wrote almost two years ago, you can build a quick, diversified MLP portfolio with ETFs and ETNs. Individual MLP securities also have great potential if you pick the right one at the right time. I can't wait to see Sean's picks in this niche.
Opportunity #3: Small Cap Energy ETFs
Sean is very keen on small-cap natural gas stocks — and rightly so. The potential profits are enormous. But if you prefer a more diversified approach, ETFs may be a great answer.
Until very recently it was hard to find energy sector ETFs that weren't dominated by multinational conglomerates like ExxonMobil (XOM). Several new entrants make it easier to get involved in smaller energy stocks:
|Natural gas comes from surprising places.|
- Market Vectors Unconventional Oil & Gas ETF (FRAK)
- PowerShares S&P Small Cap Energy Portfolio (PSCE)
- Jefferies TR/J CRB Wildcatters Exploration & Production Equity ETF (WCAT)
As you can see, the biggest and best-known ETF players are moving quickly to get involved in natural gas. That should tell you something: This is a niche with huge potential!
I think natural gas ETFs will offer great opportunities over the next year or two. Do your research, get some help and good luck!
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Current Headlines - Finance
Oil rises on U.S. crude drawdown hopes, Wall St. rally
By Barani Krishnan NEW YORK (Reuters) - Oil prices rose on Tuesday as investors anticipated a weekly drawdown in U.S. crude inventories that they hoped would boost prices closer to $50 a barrel, while a rally on Wall Street also lent support. "We're gearing up on expectations that the wildfires in Canada may finally be showing up in U.S. crude inventory numbers," said Phil Flynn, analyst at the Price Futures Group in Chicago. "If they show up decisively, it may be what the market needs to test $50." Commercial crude stocks in the United States likely fell by around 2.5 million barrels to 538.8 million in the week ended May 20, a Reuters poll showed.
Cosby accuser says she was dizzy, felt 'like jelly'
NORRISTOWN, Pa. (AP) — The accuser in the sexual assault case against Bill Cosby told authorities the comedian violated her after giving her three blue pills that made her dizzy, blurry-eyed and sick to her stomach, her legs "like jelly," according to a police report read in court Tuesday.
Oil rises on U.S. crude drawdown hopes, Wall Street rally
Oil prices rose on Tuesday as investors anticipated a weekly drawdown in U.S. crude inventories that they hoped would boost prices closer to $50 a barrel, while a rally on Wall Street also lent support. "We're gearing up on expectations that the wildfires in Canada may finally be showing up in U.S. crude inventory numbers," said Phil Flynn, analyst at the Price Futures Group in Chicago. Commercial crude stocks in the United States likely fell by around 2.5 million barrels to 538.8 million in the week ended May 20, a Reuters poll showed.
Wall Street rises more than 1 pct as bank, tech stocks jump
U.S. stocks rose to their highest in the last seven sessions on Tuesday, helped by gains in technology and financial stocks. The S&P financial sector got a big boost from a rise in banking stocks as investors speculated on the possibility of a June interest rate hike. Minutes of the Federal Reserve's April meeting suggested a June rate hike had not been ruled out, surprising investors who had thought the Fed would stand pat until the end of the year.
Wall Street rises more than one percent as bank, tech stocks jump
The S&P financial sector got a big boost from a rise in banking stocks as investors speculated on the possibility of a June interest rate hike. Minutes of the Federal Reserve's April meeting suggested a June rate hike had not been ruled out, surprising investors who had thought the Fed would stand pat until the end of the year. "I think investors are becoming more comfortable with an early rate hike because even if the Fed does raise rates in June, it will remain extremely accommodative," said Art Hogan, chief market strategist at Wunderlich Securities in New York.
TSX rises to a seven-month high, led by banks and energy stocks
Canada's main stock index rose to a seven-month high on Tuesday, led by the financials and energy groups as oil rallied and Wall Street stocks moved higher. The rally for financials comes as banks were among the biggest gainers on Wall Street amid speculation on the possibility of a June interest rate hike from the U.S. Federal Reserve. Royal Bank of Canada rose 1.1 percent to C$78.74, and Bank of Nova Scotia advanced 1.7 percent to C$64.18, while the overall financials group was up 1.4 percent.
Donald Trump faces key test in New Mexico
Donald Trump’s ability to unite a splintered Republican Party faces another crucial test Tuesday as the presumptive GOP presidential nominee makes his first visit to New Mexico, the most Hispanic state in the nation and where Latino Republicans have condemned his harsh rhetoric on immigration and other policies. The snub comes as Martinez, a longtime Trump critic who backed Florida Sen. Marco Rubio in the primary, has notably refused to line up behind the presumptive Republican presidential nominee even after GOP leaders have called for the party to unify behind him.
Jimmy Carter: Trump tapped a reservoir ‘of inherent racism’
Forensic expert: EgyptAir human remains suggest explosion
Human remains retrieved from the crash site of EgyptAir Flight 804 have burn marks and are very small in size, suggesting an explosion on board may have downed the aircraft in the east Mediterranean, a senior Egyptian forensics official said Tuesday. The official, who is part of the Egyptian team investigating the crash that killed all 66 people on board the flight from Paris to Cairo early last Thursday, has personally examined the remains at a Cairo morgue. “Whatever has been published is baseless and mere assumptions,” Hisham Abdel-Hamid told Egypt’s state MENA news agency.
Head of TSA security operations removed from position