How to invest in gas

A guide to buying, selling and investing in gas.

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Natural gas has been a reliable source of energy since the mid-19th century and currently makes up around 16% of Australia's annual electricity production. Australia is also one of the world's largest liquid natural gas producers (LNG). Thanks to its availability and necessity it has become a mainstream commodity on the investment market.

This guide discusses the four main ways that you can invest in natural gas, as well as any risks that may come with those options:

  • Buy gas stocks
  • Buy gas ETF units
  • Trade gas futures
  • Invest in MLPs

If you're looking to invest in gas oil (i.e. crude oil), you might find our guide to investing in oil helpful.

Investing in gas ETFs

Exchange-traded funds (ETFs) are a way of investing your money in a selection of assets rather than buying shares in a couple of specific companies. Find out more about ETFs.

ETFs are fairly simple and accessible, and trading them works in a similar way to regular stocks. As well as being relatively straightforward, ETFs are also seen as less risky. By investing in a basket of assets you leave yourself less vulnerable to the fluctuations of the market.

If you are new to the world of investment then ETFs may be the best choice for you. Gas is an incredibly popular commodity, with a range of companies and ETFs to choose from.

There are not any gas specific ETFs on the ASX however there are several energy and commodity theme funds that include gas companies:

  • BetaShares Commodities Basket ETF-Currency Hedged (Synthetic) (QCB)
  • VanEck Vectors Australian Resources ETF (MVR)
  • SPDR S&P/ASX 200 Resource Fund (OZR)
  • BetaShares S&P/ASX 200 Resources Sector ETF (QRE)
  • BetaShares Global Energy Companies ETF - Currency Hedged (FUEL)
Pros

  • ETFs give you widespread access to the natural gas industry at a competitive price.
  • In comparison to some of the other options ETFs are seen as a safer, more reliable choice for investors.
Cons

  • There is less control over your investment due to the diverse range of assets in an ETF.

Trading gas futures

Futures are a direct but risky investment which are subject to both the fluctuations of the market and the knowledge of the buyer. A high-risk, high-reward system, newcomers may want to gain some experience in the field before purchasing futures.

Futures, as the name suggests, are a way of buying gas at a later date at an agreed price. Depending on market movements you may end up making a solid return on your investment, or just as easily losing money.

In Australia, one of the most common methods for trading gas and other commodity futures is through CFD brokers. This way you'll never actually own the underlying commodity but you can still profit from gas price fluctuations. You can check out the table below for more info.

Some of the most commonly traded 'gas' commodities in the futures markets include:

  • Liquid Natural Gas
  • Low Sulphur gasoline
  • Gasoline
Pros

  • With a good knowledge of the market and some good fortune gas futures could bring you large returns on your investment.
  • A very direct way of owning a share of a commodity.
Cons

  • The market is unpredictable and constantly fluctuating - futures are vulnerable to these movements and making the wrong investment can lose you money.
  • If you don’t act on futures within the specified period they expire and are worth nothing.

Buying shares in gas companies

Stocks are one of the more conventional ways to invest in a commodity. Gas is a popular investment and a necessary form of energy for many households around the world, so there are multiple gas-producing companies to choose from: ranging from Chevron to BHP to Beach Energy. Stocks are simple to buy through brokers and advisors, but the decision on what shares to buy is up to you!

Buying stocks takes some knowledge of the market and its fluctuations, but this can be safer than investing in futures as you buy stock at the current price that is displayed. However, ETFs may still be a safer option as you aren’t relying on the performance of just one or two companies.

Pros

  • One of the most conventional and accessible ways of entering the market.
  • Choose from a variety of stock from different companies.
  • Exit the market at any time.
Cons

  • Interference from businesses involved in the refining process can curb a company’s stock value, so share prices don't always grow at the same rate as the price of the commodity itself.
  • As with all shares on the stock market, their value can go down as well as up.

Investing in MLPs

It is also possible to buy stocks in Master Limited Partnerships (MLPs). These are structured to offer certain tax advantages that mean profits are only taxed when they are distributed to the general and limited partners of a company. This type of set-up is appealing to some investors, as MLP returns are not taxed in the same way as dividend-paying shares.

MLPs also tend to be seen as a lower risk, but longer term, investment option. There are some risks that come with MLPs however, including demand, market volatility and the fluctuation of prices, as well as new legislation, environmental disasters/hazards and political and social shifts.

Pros

  • Some of the dividend payments offered can bring strong returns on your investment.
  • MLPs are easy to access through brokers and advisors.
Cons

  • As with shares, businesses with an interest in the manufacturing process of gas can influence market value, meaning stock prices may not be in line with commodity prices.
  • Demand and market risk can have an impact on MLPs, and companies may choose to withdraw their dividends.

Compare brokers to invest in gas

Name Product Standard brokerage fee Inactivity fee Markets International
eToro (global stocks)
US$0
US$10 per month if there’s been no login for 12 months
Global shares, US shares, ETFs
Yes
Zero brokerage share trading on US, Hong Kong and European stocks with trades as low as $50.
Note: This broker offers CFDs which are volatile investment products and most clients lose money trading CFDs with this provider.
Join the world’s biggest social trading network when you trade stocks, commodities and currencies from the one account.
IG Share Trading
$8
$50 per quarter if you make fewer than three trades in that period
ASX shares, Global shares
Yes
$0 brokerage for US and global shares plus get an active trader discount of $5 commission on Australian shares.
Enjoy some of the lowest brokerage fees on the market when trading Australian shares, international shares, plus get access to 24-hour customer support.
ThinkMarkets Share Trading
$8
No
ASX shares
No
$8 flat fee brokerage for CHESS Sponsored ASX stocks (HIN ownership), plus free live stock price data on an easy to use mobile app.
Superhero share trading
$5
No
ASX shares, US shares, ETFs
Yes
Earn up to 15,000 Qantas frequent flyer points when you transfer an exisiting balance or trade. Offer valid for all new and existing Superhero members until 28 February.
Pay zero brokerage on US stocks and all ETFs and just $5 (flat fee) to trade Australian shares from your mobile or desktop.
GO Markets Share Trading
$7.70
No
ASX shares, Forex, CFDs, ETFs
No
Pay zero brokerage on your first 20 trades and $7.70 after that on over 2,500 ASX listed shares from either your desktop or mobile.
Opentrader Share Trading
$5
No
ASX shares, Options trading, ETFs, Warrants
No
Gain access to chess sponsored shares for as little as $5 per trade.
Get free live data, advanced charting and even gain experience before trading through fantasy portfolios when you sign up with OpenTrader.
CMC Markets Invest
$11
No
ASX shares, Global shares, mFunds, ETFs
Yes
$0 brokerage on global shares including US, UK and Japan markets.
Trade up to 9,000 products, including shares, ETFs and managed funds, plus access up to 15 major global and Australian stock exchanges.
Saxo Capital Markets (Classic account)
$5
No
ASX shares, Global shares, ETFs
Yes
Access 19,000+ stocks on 40+ exchanges worldwide
Low fees for Australian and global share trading, no inactivity fees, low currency conversion fee and optimised for mobile.
HSBC Online Share Trading
$19.95
No
ASX shares, mFunds, ETFs, Bonds
No
Limited-time offer: Join HSBC’s online trading account before 28 February 2022 and HSBC will reimburse you up to $100 on your first 5 trades. Also traders who transfer $50k+ will get a $200 bonus(T&Cs apply).
Make trades online with brokerage fees starting from just $19.95 with an HSBC Online Share Trading account. Plus gain access to complimentary expert research, trading ideas and tools.
SelfWealth (Basic account)
$9.5
No
ASX shares, US shares
Yes
Trade ASX and US shares for a flat fee of $9.50, regardless of the trade size.
New customers receive free access to Community Insights with SelfWealth Premium for the first 90 days. Follow other investors and benchmark your portfolio performance.
Bell Direct Share Trading
$15
No
ASX shares, mFunds, ETFs
No
Invest in Australian shares, options and managed funds from the one account with no inactivity fee.
Bell Direct offers a one-second placement guarantee on market-to-limit ASX orders or your trade is free, plus enjoy extensive free research reports from top financial experts.
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Important: Share trading can be financially risky and the value of your investment can go down as well as up. Standard brokerage is the cost to purchase $1,000 or less of equities without any qualifications or special eligibility. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

Name Product Minimum Opening Deposit Minimum Opening Deposit Commission - ASX 200 Shares Available markets Platforms
Vantage CFD
$200
$200
$8 AUD or 0.08%
Forex, CFD shares, Indices, Cryptocurrencies, Commodities
MetaTrader 4
MetaTrader 5
TradingView
Disclaimer: CFD Service. Your capital is at risk.
Vantage FX has some of the lowest CFD trading fees in Australia, plus you can place trades and find global trends through the new TradingView charts platform.
eToro CFD
US$200
US$200
No commission
Forex, Shares, Indices, Cryptocurrencies, Commodities, ETFs
eToro Trading Platform
Note: This broker offers CFDs which are volatile investment products and most clients lose money trading CFDs with this provider.
Join the largest social trading network in the world.
Plus500 CFD
$200
$200
No commission
CFD on Forex, Commodities, Cryptocurrency, Indices, Shares, Options and ETF's
Plus500 Trading Platform
Disclaimer: CFD Service. Your capital is at risk.
Trade CFDs on Australian and International shares, indices, cryptocurrencies, commodities and more.
Capital.com CFD
$0
$0
$0
Forex, Shares, Indices, Commodities, Crypto, ETFs
Mobile Trading Platform
Disclaimer: Volatile investment product. Most clients lose money trading with this provider.
Trade with an award winning platform that allows access to over 4,000 markets, across CFDs with leverage across the world’s most popular indices, commodities, cryptocurrencies, shares and currency pairs.
ThinkMarkets CFD
$0
$0
$0 for standard account
Forex, indices, commodities, metals, share CFDs, ETF CFDs, futures
MetaTrader4, MetaTrader5, ThinkTrader
Disclaimer: Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Trade forex, commodities and CFDs using MetaTrader4/MetaTrader5 platforms or access advanced analysis tools through ThinkTrader.
IG CFD broker
$0
$0
0.08% with $7 minimum
Indices, FX, Shares, Commodities, Cryptocurrency, ETPs, Options, Interest Rates, Bonds
MetaTrader 4
ProReal Time
IG Trading Platform and Apps
L2
Disclaimer: CFD Service. Your capital is at risk.
Trade from over 15,000 markets with Australia's leading service for CFD trading and forex.
AvaTrade CFD
$100
$100
No commission
ASX shares, global shares, indices, metals, cryptocurrencies, commodities, ETFs, options, forex
AvaTradeGO
MetaTrader 4
MetaTrader 5
Disclaimer: Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Trade from an extensive selection of forex and CFD products, while getting access to extensive education resources, all for as little as $100.
IC Markets CFD (True ECN Account)
US$200
US$200
0.1% per side
ASX shares, global shares, indices, commodities, forex, cryptocurrencies
MetaTrader 4
MetaTrader 5
cTrader
Disclaimer: CFD Service. Your capital is at risk.
Trade 230+ different products with fast execution under 40 milliseconds on average.
Go Markets CFD
$200
$200
$0
Stocks, Indices, Commodities, Crypto
MetaTrader 4
MetaTrader 5
WebTrader
Mobile Trading Platforms
Disclaimer: CFD Service. Your capital is at risk.
Trade over 600 products across CFDs, forex, indices, metals and commodities with award winning education and customer service provided.
Saxo Capital Markets CFD
3,000
3,000
0.10% with $6 minimum
Indices, FX, Shares & ETFs, Commodities, Cryptocurrencies, Options, Bonds
SaxoTraderGO
SaxoTraderPRO
Disclaimer: CFD Service. Your capital is at risk.
Award-winning trading platfrom with extensive charting tools and reliable execution.
City Index CFD
$0
$0
0.08% with $5 minimum
ASX shares, 4,500 global shares, indices
MetaTrader 4
At Pro
Advantage Web
Disclaimer: CFD Service. Your capital is at risk.
Trade CFDs on indices, FX, global & Australian shares and commodities, plus access other markets such as metals, bonds and interest rates.
Blueberry Markets CFD Trading
US$100
US$100
$20 per month subscription plus 2% of trade size
Indices, ASX200 Shares, Commodities, Cryptocurrency
MetaTrader 5
Disclaimer: CFD Service. Your capital is at risk.
Bottom of the market fees on forex, CFDs and commodities with 24/7 quality customer service.
CMC Markets
$0
$0
0.09% with a $7 minimum
Forex, Indices, Commodities, Cryptocurrencies, Global shares, ASX shares, Bonds
CMC Next Generation CFD, MetaTrader 4
Disclaimer: CFD Service. Your capital is at risk.
Share CFD and forex ideas with other traders and take your strategy to the next level with over 100 technical indicators and charts on CMC’s mobile-friendly Next Generation platform.
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Compare up to 4 providers

Trading CFDs and forex on leverage is high-risk and you could lose more than your initial investment. It may not be suitable for every investor. Refer to the provider’s PDS and consider the risks before trading.

Name Product Monthly fee Options trading fee Standard brokerage fee
Opentrader Share Trading
$25
AUD $5
Gain access to chess sponsored shares for as little as $5 per trade.
Get free live data, advanced charting and even gain experience before trading through fantasy portfolios when you sign up with OpenTrader.
CMC Markets Invest
$0
$33
AUD $11 or 0.1%
$0 brokerage on global shares including US, UK and Japan markets.
Trade up to 9,000 products, including shares, ETFs and managed funds, plus access up to 15 major global and Australian stock exchanges.
Saxo Capital Markets (Classic account)
$0
$5
AUD $5
Access 19,000+ stocks on 40+ exchanges worldwide
Low fees for Australian and global share trading, no inactivity fees, low currency conversion fee and optimised for mobile.
HSBC Online Share Trading
$0
$30
AUD $19.95
Limited-time offer: Join HSBC’s online trading account before 28 February 2022 and HSBC will reimburse you up to $100 on your first 5 trades. Also traders who transfer $50k+ will get a $200 bonus(T&Cs apply).
Make trades online with brokerage fees starting from just $19.95 with an HSBC Online Share Trading account. Plus gain access to complimentary expert research, trading ideas and tools.
Bell Direct Share Trading
$0
$30
AUD $15
Invest in Australian shares, options and managed funds from the one account with no inactivity fee.
Bell Direct offers a one-second placement guarantee on market-to-limit ASX orders or your trade is free, plus enjoy extensive free research reports from top financial experts.
loading

Compare up to 4 providers

Important: Share trading can be financially risky and the value of your investment can go down as well as up. Standard brokerage is the cost to purchase $1,000 or less of equities without any qualifications or special eligibility. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

Is gas a safe investment?

The world relies on gas for energy, and its abundance makes it a quite a reliable commodity on the stock market. However, the market is never completely safe, and gas is no exception:

  • Pipeline incidents: A risk for the environment as well as your profits, a burst pipeline can have disastrous effects on both your investments and the ecosystem at large.
  • Dividend cuts: Gas companies often distribute dividends to shareholders, which allows their investments to make a regular income. If a company cannot make enough money however, dividends can be cut. This can lead to stock prices plummeting.
  • Price volatility: Prices for gas have fluctuated violently over the years, usually as a result of shifts in supply. Gas is also seasonal, with people using more during the winter, which can also affect prices.

FAQs

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

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