Unlike oil prices, which have bounced back sharply in the last few months thanks to improving fundamentals, natural gas prices have continued to struggle. The Horizon’s BetaPro NYMEX Natural Gas Bull Plus (ETF) (TSX: HNU) is still down more than 12% in the last three months even as oil prices have rallied.
The main reason why natural gas prices continue to struggle is because of weak fundamentals. However, the fundamentals could soon change. In a recent report, the U.S. Energy Information Administration (EIA) said that natural gas production in the U.S. could be leveling off. Indeed, if we have a hot summer in the U.S., natural gas prices could see a spike. If that happens than HNU will be an attractive proposition for Canadian investors.
The fund seeks daily investment results that correspond to two times the daily performance of the New York Mercantile Exchange (NYMEX) natural gas futures contract for the next delivery month. The ETF is still down more than 42% for the year. But it is up sharply in trading today. At last check, the ETF was trading 5.54% higher at $7.81 on above average volume of 2.64 million.
