Favorable Risk-Reward
$United States Natural Gas Fund LP(UNG)$
Whilst AI stocks are all the rage at the moment, natural gas has been languishing... prices are extremely low now, below the cost of production. History has shown that when this happen the average price was always higher long term. The reason is similar to any commodity, producers will begin to curtail production causing supply to fall below demand & price move upwards as a consequence.
A recent report from Baker Hughes showed that gas rig count is now 30% lower than a year ago. The 2 biggest natural gas producers in the U.S. had announced production cuts.
Whilst I don't know when prices will rebound, given these statistics and historical low prices, the odds are in favor of a significant rebound. To me it's a highly favorable risk to reward entry as these levels. I would be a buyer at list levels. As always DYOR and make sure you can hold till the rebound.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
