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Temperate Weather Stifles Natural Gas ETF


A higher-than-expected supply injection cooled natural gas related exchange traded funds, with gas futures touching a five-week low on Thursday.

The United States Natural Gas Fund (UNG) was 0.5% lower Thursday. UNG is down 3.3% year-to-date.

The U.S. Energy Information Administration revealed that natural gas stockpiles increased 87 billion cubic feet in the week ended Sept. 20 while analysts expected a rise in the mid-70 bcf range, according to Investing.

“It’s a big number, no doubt,” Teri Viswanath, director of commodities strategy at BNP Paribas SA, said in a Bloomberg article.. “There is not a lot of demand. The current restocking under way is representative of a well-supplied market.”

Inventories were sitting around 3.386 trillion, about 179 bcf lower year-over-year but 30 bcf above its 5-year average.

NYMEX natural gas futures dipped 0.7%, trading around $3.47 per million British thermal units.

Looking ahead, temperature forecasts are above-normal in the north, which won’t help increase demand for natural gas for air condition or heating this time of the year. Natural gas demand typically dips during autumn and spring.

The weather forecast for the next two weeks is expected to be just right, above average, that is, in the northern half of the country,” John Kilduff, partner at Again Capital LLC and editor of the Energy OverView, said in the Bloomberg article. “So, the demand picture remains quite weak.”

United States Natural Gas Fund

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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.