What Are Some Risks When Investing in Natural Gas?


Quick Answer

Examples of the different risks involved with natural gas include volatility of commodity price, possible reserve inaccuracies and regulatory risk, according to The Motley Fool. Additional risks can be discovered by examining the annual reports of natural gas companies.

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Full Answer

Commodity price volatility is one of the largest risks in investing in natural gas, notes The Motley Fool. The future price of natural gas is often impossible to predict, making it hard for companies to meet their monetary obligations. One of the biggest reasons for potential reserve inaccuracies is that predictions could be made with faulty information. Poorly predicted reserve estimates can result in a reserve value write-down.

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