An ETF for a Rebound in Natural Gas Prices

NEW YORK (TheStreet) -- The beginning of the end of the slide in natural gas prices is upon us and investors should position themselves in ETFs such as First Trust ISE-Revere Natural Gas (FCG) ahead of the turn.

Natural gas suffered a double whammy in the past two years. First, the global economic crisis crushed demand from all sources: residential, commercial, industrial and electric power.

Then, with consumption low, output increased as new discoveries and production were brought to market. The result was a price that slid and stagnated even as the U.S. and global economy recovered, pushing the price of oil up about 100% from crisis lows.

A major source of falling demand came from industrial and electric power. As this chart from the Energy Information Administration (EIA) shows, these two sources of demand were shrinking from mid-late 2007 until the end of 2009.

These two sources make up almost two-thirds of total demand. Residential and consumer demand, a combined one-third of demand, recovered earlier, and the result was higher total consumption in January than was seen in the previous two years.

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