Will the Cold Snap Heat Up Natural Gas ETFs?

Natural gas, along with related exchange traded funds (ETFs), finally saw an infusion of lifeblood. The price of natural gas surged this week as the supply of the commodity dropped and money from other areas of the market found its way into natural gas.

On Thursday, natural gas prices jumped 8% as the government reported the first drop in supplies in nine months, reports Chris Kahn for Yahoo! Finance. Furthermore, a sell-off in the oil markets helped fuel the rise in natural gas prices. Natural gas trading volumes nearly doubled this week. (Sector Highlight: Natural Gas ETFs)

The spread of the cold winter storm from the Midwest to the East is also boosting natural gas prices higher. It’s unlikely, though, that this would significantly drive up heating costs since utilities have already locked in cheap prices.

The unprecedented volumes of natural gas reserves may be what’s keeping prices down. Storage of natural gas is above capacity in the West, and at or close to capacity everywhere else. The Energy Information Administration (EIA) reported a drop in storage last week, the first since the week of March 13.

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

• United States Natural gas (NYSEArca: UNG): down 57.9% year-to-date



• First Trust ISE-Revere Natural Gas (NYSEArca: FCG): up 37.3% year-to-date

• United States 12-Month Natural Gas (NYSEArca: UNL): up 14.6% in the last week (Recently launched ETF)

Max Chen contributed to this article.