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Natural Gas ETF Falls Below 200-Day Trend for First Time in Three Months


United States Natural Gas Fund (UNG) dropped 3.5% Wednesday to fall below the 200-day simple moving average for the first time since September. Relatively warm winter temperatures and lingering supply glut worries are pressuring the commodity’s price.

UNG, the natural gas ETF, was down 26.9% over 2012.

Natural gas plunged as much as 9% after the Commodity Weather Group projected that the colder-than-average weather will turn to above-normal temperatures from Jan. 7 through Jan. 11, reports Christine Buurma for Bloomberg.

Natural gas futures was down 3.3% to $3.2 per British thermal unit in late afternoon trading Wednesday.

“We’re going to see some warm weather across the primary gas-consuming regions,” Gene McGillian, an analyst and broker at Tradition Energy, said in the article. “As we get into the new year without signs of sustained cold weather, the fundamental picture is going to force us lower.”

According to the National Oceanic and Atmospheric Administration, 2012 was probably the warmest year on record in the U.S..

U.S. gas inventories hit 3.652 trillion cubic feet in the week ended Dec. 21, or a record for that period of the year, with supplies 12.8% above the five-year average, but it was lower than the 3.929 trillion cubic feet all-time high for the week ended Nov. 2.

The U.S. is currently experiencing a boom in oil and natural gas production – America has met 83% of its energy needs in the first nine months of the year. The government estimates that natural gas output rose 0.6% over 2012. [ETF Chart of the Day: Natural Gas Fracking]

United States Natural Gas Fund

For more information on natural gas, visit our natural gas category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.