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How to invest in gas

A guide to buying, selling and investing in gas.

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. When trading CFDs, you'll never actually own the underlying asset. Instead you will be trading based on the future price of gas. 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 Price per trade Inactivity fee Asset class International
eToro
Finder AwardExclusive
eToro
$0
US$10 per month if there’s been no log-in for 12 months
ASX shares, Global shares, US shares, ETFs
Yes
Finder exclusive: Get 12 months of investment tracking app Delta PRO for free when you fund your eToro account (T&Cs apply).
CFD service. Capital at risk.
Join the world's biggest social trading network when you trade stocks, commodities and currencies from the one account.
CMC Invest
Finder Award
CMC Invest
$0
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
$0 brokerage on US, UK, Canadian and Japanese markets (FX spreads apply).
Trade over 45,000 shares and ETFs from Australia and 15 major global markets. Plus, buy Aussie shares or ETFs for $0 brokerage up to $1,000 (First buy order of each security, each day - excludes margin loan settled trades).
Moomoo Share Trading
US$0.99
$0
ASX shares, Global shares, US shares, ETFs
Yes
Finder exclusive: Get an additional 30 days on top of the regular brokerage-free period for new accounts. T&Cs apply.
Trade shares on the ASX, the US markets and buy ETFs with Moomoo. Plus join a community over 20 million investors.
Spaceship US Investing
US$0
$0
US shares, ETFs
Yes
Dive into US markets with $0 brokerage, starting with just a $10 investment.
Unlock US stocks and ETFs with minimal entry barriers, offering straightforward, low-cost options for new and seasoned investors.
Tiger Brokers
US$2
$0
ASX shares, Global shares, US shares, ETFs
Yes
Finder exclusive: 10 no-brokerage US or ASX market trades in the first 180 days + 7% p.a. on uninvested cash with first deposit of any amount, plus US$30 TSLA + US$30 NVDA shares with deposits up to AU$2000. T&Cs apply.
Trade Australian, US and Asian stocks with no minimum deposit on Tiger Broker’s feature-packed platform.
Webull
US$0.25
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
Sign up & deposit $200 to get $100 of rewards value, or deposit $1,000 to get $200 worth. Up to $5,450 value available. T&Cs apply.
Trade ASX and US stocks and US options, plus gain access to inbuilt news platforms and educational resources. You can also start trading for less with fractional shares.
Saxo Invested
US$1
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
Access 22,000+ stocks on 50+ exchanges worldwide
Low fees for Australian and global share trading, no inactivity fees, low currency conversion fee and optimised for mobile.
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Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

Disclaimer: General information only. All forms of investments (and in particular, trading CFDs, commodities and forex) carry significant risk, including the risk of losing more than the invested amounts, market volatility and liquidity risks. Past performance is no guarantee of future results. Such activities are not suitable for most investors.
Name Product Minimum Opening Deposit Minimum Opening Deposit Commission - ASX 200 Shares Available CFD markets Platforms
Pepperstone CFD
$0
$0
$5 or 0.07%
Australian Stocks, Commodities, Cryptocurrencies, ETFs, Forex, Global Stocks, Indices (CFDs only)
MetaTrader 4
MetaTrader 5
cTrader
TradingView
Pepperstone Trading Platform
Disclaimer: CFD Service. Your capital is at risk.
Get access to more than 60+ forex and CFD markets when you sign up with this award-winning Australian broker. Plus, access the new advanced TradingView charts platform.
Vantage CFD
$50
$50
No commission
Commodities, Cryptocurrencies, ETFs, Forex, Global Stocks, Indices (CFDs only)
MetaTrader 4
MetaTrader 5
TradingView
Disclaimer: CFD Service. Your capital is at risk.
Vantage has some of the lowest CFD trading fees in Australia including $0 commissions on all Gold trades. Plus you can find global trends and place trades through the new TradingView charts platform.
IG CFD broker
$0
$0
0.08% with $7 minimum
Bonds, Commodities, Cryptocurrencies, ETFs, Forex, Global Stocks, Indices, Options (CFDs only)
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.
Plus500 CFD
$100
$100
No commission
Commodities, Cryptocurrencies, ETFs, Forex, Global Stocks, Indices, Options (CFDs only)
Plus500 Trading Platform
Disclaimer: CFD service. Your capital is at risk.
Trade CFDs on Australian and International shares, indices, cryptocurrencies, commodities and more.
IC Markets CFD (True ECN Account)
US$200
US$200
0.1% per side
Australian Stocks, Global Stocks, Indices, Commodities, Forex, Cryptocurrencies (CFDs only)
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.
Saxo Invested CFD
0
0
0.08% with $3 minimum
Bonds, Commodities, Cryptocurrencies, ETFs, Forex, Global Stocks, Indices, Options, (CFDs only)
SaxoTraderGO
SaxoTraderPRO
Disclaimer: CFD Service. Your capital is at risk.
Award-winning trading platfrom with extensive charting tools and reliable execution.
Blueberry Markets CFD Trading
US$100
US$100
$20 per month subscription plus 2% of trade size
Australian Stocks, Commodities, Cryptocurrencies, Indices (CFDs only)
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.
ACY Securities CFD
$50
$50
No commission
Australian Stocks, Bonds, Commodities, Cryptocurrencies, ETFs, Forex, Global Stocks, Indices, Metals (CFDs only)
MetaTrader 4
MetaTrader 5
Disclaimer: CFD Service. Your capital is at risk. Trade over 2,000 products across CFDs, forex, indices, metals, shares, commodities and cryptocurrency, starting from as low as $50 a trade.
loading

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
CMC Invest
Finder Award
CMC Invest
$0
$33
$0
$0 brokerage on US, UK, Canadian and Japanese markets (FX spreads apply).
Trade over 45,000 shares and ETFs from Australia and 15 major global markets. Plus, buy Aussie shares or ETFs for $0 brokerage up to $1,000 (First buy order of each security, each day - excludes margin loan settled trades).
Tiger Brokers
Exclusive
Tiger Brokers
$0
US$0.95/contract (Min. US$3 per order)
US$2
Finder exclusive: 10 no-brokerage US or ASX market trades in the first 180 days + 7% p.a. on uninvested cash with first deposit of any amount, plus US$30 TSLA + US$30 NVDA shares with deposits up to AU$2000. T&Cs apply.
Trade Australian, US and Asian stocks with no minimum deposit on Tiger Broker’s feature-packed platform.
Saxo Invested
Saxo Invested
$0
US$2
US$1
Access 22,000+ stocks on 50+ exchanges worldwide
Low fees for Australian and global share trading, no inactivity fees, low currency conversion fee and optimised for mobile.
Webull
$0
US$0.50
US$0.25
Sign up & deposit $200 to get $100 of rewards value, or deposit $1,000 to get $200 worth. Up to $5,450 value available. T&Cs apply.
Trade ASX and US stocks and US options, plus gain access to inbuilt news platforms and educational resources. You can also start trading for less with fractional shares.
loading

Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. 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

Important information: Powered by Finder.com.au. This information is general in nature and is no substitute for professional advice. It does not take into account your personal situation. 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 most investors. You do not own or have any interest in the underlying asset. Capital is at risk, including the risk of losing more than the amount originally put in, market volatility and liquidity risks. Past performance is no guarantee of future results. Tax on profits may apply. Consider the Product Disclosure Statement and Target Market Determination for the product on the provider's website. Consider your own circumstances, including whether you can afford to take the high risk of losing your money and possess the relevant experience and knowledge. We recommend that you obtain independent advice from a suitably licensed financial advisor before making any trades.

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