Exports buoy natural gas ETFs

Short-term demand driven by colder winter conditions has increased support for gas prices

Exports buoy natural gas ETFs

Natural gas ETFs in the US have gained ground this winter from increased heating demand. Long-term prospects are also positive as the US becomes the third-largest exporter of liquefied natural gas, according to a report by etftrends.com.

Figures from S&P Global Platts show that the US has exported an average of 7.4 billion cubic feet of gas per day in November, compared to 7 billion per day imported. This marks the first time in 60 years that the US was a net exporter of natural gas, according to the US Energy Information Administration.

There is optimism for the sector due to last year’s lifting of restrictions on crude oil exports. The move has opened up the global market for US natural gas, a by-product of shale oil production that has been increasing as a result of an ongoing industry boom.

The largest export destinations for the US are Mexico and Canada, which are co-signatories in the North American Free Trade Agreement. The US is also exploring the possibility of shipping natural gas to Asian countries it has trade deals with, like Singapore and South Korea.

However, some pundits are concerned over the possible adverse effect of a Donald Trump presidency on US trade with Mexico, which would slow gas exports south of the border.

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