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My Top Picks For Natural Gas Stocks And Funds

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Written By
Dan Buckley
Contributor Image
Written By
Dan Buckley
Dan Buckley is an US-based trader, consultant, and part-time writer with a background in macroeconomics and mathematical finance. His expert insights for DayTrading.com have been featured in multiple respected media outlets, including Yahoo Finance, AOL and GOBankingRates. As a writer, his goal is to explain trading and finance concepts in levels of detail that could appeal to a range of audiences, from novice traders to those with more experienced backgrounds.
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Updated
Jun 25, 2025

Below are my top picks for natural gas and stock funds.

Direct Exposure – Producers

  • EQT Corp (EQT) – The largest natural gas producer in the Appalachian Basin, with significant Marcellus-field reserves.
  • Cheniere Energy (LNG) – US’s largest LNG exporter, with expanding export capacity (Corpus Christi Stage 3 now underway).

Infrastructure/Midstream

  • Kinder Morgan (KMI) – Operates the largest US nat gas pipeline network, transporting ~40% of domestic gas.
  • Enbridge (ENB) – Owns 24,000 mi/38,000 km of gas pipelines across North America and is a stable toll-based utility play.

Funds & ETFs

  • United States Natural Gas Fund (UNG) – A popular vehicle for direct exposure to natural gas futures.
  • Geopolitical volatility – Middle East tensions around the Strait of Hormuz are pushing LNG spot prices higher, Asia LNG spot index at ~$14/mmBtu, with European prices up ~20% in a week.
  • Strong US production – EIA signals record-high US output in 2025 (~105 Bcf/d), with rising LNG export capacity. Pipeline bottlenecks remain an issue.
  • Tight formidables – Global demand back to structural growth since 2024 (2.7% increase in 2024), but inventories are low and Europe is competing for LNG cargoes.
  • Thermal coal substitution – Some countries shifting toward coal due to elevated LNG prices (~$14 vs ~$12 for coal).
  • US storage dynamics – Henry Hub July futures at $3.71. EIA lowered average 2025 price forecast to $4.02/mmBtu.

2025 Outlook for Natural Gas

Upside Triggers

  • Geopolitics – Any disruption in the Strait of Hormuz could spike prices
  • Export bottlenecks – US prices may rise if LNG export capacity scales slower than demand.

Downside Risks

  • Mild weather reduces demand and cools spot prices.
  • Coal rebound – Cheaper coal options may dampen future gas demand in Asia and Europe.
  • Subdued global demand – China’s LNG demand could decelerate due to softer economic growth.

Investor Takeaway

Expect a volatile trading range (it’s traditionally ~3x as volatile as US stocks).

Structural tailwinds remain from LNG demand and US-export buildout, but expect 2025 average prices to hover in the $3.50–$5 range, higher if geopolitics are a bigger factor.

Investment Strategy by Profile

  • Value-oriented producer investors – Consider EQT and LGN for leverage to higher nat gas prices.
  • Yield/midstream investors – Kinder Morgan and Enbridge provide stable distributions with less price sensitivity.
  • Speculative traders – UNG can be used tactically, but beware of roll yield and futures curve risks.
  • Diversified exposure – Explore low-cost nat gas ETFs.

Price Forecast

EIA: ~$4.02/mmBtu average in 2025, with current spot in the high-$3’s.

When thinking about nat gas prices in terms of a probability distribution, typically there’s a skew where there’s a long upper tail to the price range, but the most common outcomes in the distribution sit below the market price. For example, the attached image is a price distribution on UNG using the January 2026 options.

Price distribution on UNG using January 2026 options