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Natural Gas ETFs Fire Up on Supply Data


Natural gas exchange traded funds rallied Thursday on an unexpectedly small increase in U.S. inventories.

The United States Natural Gas Fund (UNG) jumped 5.1% during trading Thursday. The fund has plunged 15.9% over the past three months, but it is up 1.7% year-to-date. [Amid Commodities Declines, Don’t Forget Nat Gas ETFs]

The Energy Information Administration stated that gas storage only increased 58 billion cubic feet, where as most analyst expected an increase of 64 bcf, reports Daivd Bird for the Wall Street Journal.

Total gas storage stands at around 2.745 trillion cubic feet, down 414 billion cubic feet year-over-year and 34 billion cubic feet below its five-year average.

“The smaller build…suggests a somewhat tighter background supply/demand balance that will translate into a less bearish outlook for the coming weeks,” Tim Evans, analyst at Citi Futures, said in the article.

Natural gas futures were 5.1% higher Thursday, trading around $3.81 per million British thermal units.

“The was a bullish number,” Kyle Cooper, analyst at IAF Advisors, said in the article. “The first one the market has seen for a while.”

However, Cooper warns that “summer is half over and the demand we are seeing now, which will be shown in next week’s data, may be the highest we see all summer.”

The National Oceanic and Atmospheric Administration forecasts above-normal temperatures west of the Rockies and in New England in August, but the outlook is unclear for most of eastern U.S. for the last month of summer, according to a separate Wall Street Journal report.

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.