Exchange traded funds (ETFs) following natural-gas futures were up more than 2% in early trading Monday, making up for at least some of their recent declines.
However, temperate weather forecasts have dissuaded investors from betting on natural gas, which has sapped the heat from ETFs.
U.S. Natural Gas Fund (NYSEArca: UNG) and iPath Dow Jones-UBS Natural Gas Subindex Total Return ETN (NYSEArca: GAZ) gained over 2% in recent action Monday. The performance of the two natural-gas products diverged on Friday.
Natural-gas futures slid last week after a government report showed a smaller-than- expected decline in U.S. supplies. [Natural-Gas ETFs Extend Losing Streak After Inventory Report.]
“The weather is not supportive of increasing prices, much less sustaining prices, and supply is a huge fundamental weight on the market,” said Jay Levine, head of an energy brokerage, according to Bloomberg. “People feel that there’s a dark cloud over natural gas that’s not going to dissipate.” [Natural Gas ETFs Decline On Warmer Weather Forecasts.]