Comprehensive Guide to Natural Gas Investing: Stocks, ETFs, and Futures

As a critical energy source for the global economy, natural gas accounts for approximately one-quarter of worldwide electricity generation. In the U.S., natural gas has surpassed coal as the largest fuel for power generation. Its investment appeal stems from its pivotal role in the energy transition—for example, natural gas-fired power plants can flexibly adjust output to support intermittent renewable sources like wind and solar. However, global demand remains highly volatile due to weather dependency.

For investors, natural gas offers a potential addition to diversified portfolios. Success in this sector requires adapting to market fluctuations by strategically selecting stocks, ETFs, or futures. Investors should monitor energy transition trends, weather patterns, and policy shifts while aligning strategies with their risk tolerance.

Below is an in-depth analysis of three primary natural gas investment avenues:

1. Investing in Natural Gas Stocks

Investors can gain exposure by targeting companies engaged in natural gas exploration, production, or distribution. Most natural gas firms also operate in oil, making pure-play natural gas stocks rare. Below are key U.S.-listed natural gas companies (listed alphabetically; market caps exceeding $2 billion at the time of data collection):

Antero Resources (NYSE:AR)
A major operator in the Appalachian Basin and a leading U.S. supplier of liquefied petroleum gas (LPG) and natural gas to global export markets.

Civitas Resources (NYSE:CIVI)
Focused on DJ Basin and the Permian Basin, with natural gas and natural gas liquids (NGLs) comprising ~62% of its proven reserves.

Comstock Resources (NYSE:CRK)
Specializes in the Haynesville Shale (Louisiana and East Texas), directly connected to Gulf Coast markets and LNG export corridors.

ConocoPhillips (NYSE:COP)
A global energy giant operating in 14 countries, with significant LNG market leadership and a diversified portfolio including natural gas and NGLs.

Coterra Energy (NYSE:CTRA)
Derives 50% of revenue from natural gas and NGLs, with assets spanning the Permian Basin, Marcellus Shale, and Anadarko Basin.

Diamondback Energy (NASDAQ:FANG)
A Permian Basin-focused unconventional oil and gas producer, with natural gas and NGLs representing half of its reserves.

Devon Energy (NYSE:DVN)
Prioritizes natural gas production as part of its 2025 growth strategy, operating across the Delaware Basin, Eagle Ford, and other key regions.

EOG Resources (NYSE:EOG)
A leading U.S. oil and gas producer with a long-term LNG supply agreement with energy trader Vitol.

Northern Oil & Gas (NYSE:NOG)
A non-operator model company with upstream assets in the Williston, Uinta, Permian, and Appalachian basins, mitigating risk through fractional ownership.

Range Resources (NYSE:RRC)
The largest landowner in the Marcellus Shale, focused on Appalachian Basin exploration and production.

2. Natural Gas ETFs

Exchange-traded funds (ETFs) provide diversified exposure to the sector. Notable options include:

iShares U.S. Oil & Gas Exploration & Production ETF (BATS:IEO)
Targets U.S. energy firms, ideal for short-term traders. Holdings overlap with many stocks listed above.

SPDR S&P Oil & Gas Exploration & Production ETF (ARCA:XOP)
Offers balanced exposure to U.S. energy companies at lower costs than IEO, suited for tactical bets.

ProShares Ultra Bloomberg Natural Gas ETF (ARCA:BOIL)
A leveraged ETF (2x daily returns) with high volatility, recommended only for experienced traders.

United States Natural Gas Fund (ARCA:UNG)
Tracks near-term natural gas prices but faces contango risks, making it better for short-term trading.

United States 12 Month Natural Gas Fund LP (ARCA:UNL)
Diversifies across futures contracts to reduce contango impacts, suitable for medium-term strategies.