A cold winter bite has helped investors warm up to natural gas exchange traded funds on expectations that the industry’s stockpiles are starting to fall.
The United States Natural Gas Fund (NYSEArca: UNG) was 0.6% higher Wednesday and increased 3.8% over the past week.
Natural gas futures were up 4.7% Tuesday and added another 1.0% Wednesday.
Beth Sewell, managing partner at Quantum Power & Gas Services, said that the colder than average weather in the mid-continent and Eastern U.S. raised demand for natural gas, MarketWatch reports.
Meanwhile, heavy maintenance at nuclear power plants also forced natural gas powered utilities to pick up the slack, reports David Bird for the Wall Street Journal.
In the mid-Atlantic, “Nuclear outages compensated for hurricane Sandy-related demand destruction,” Kent Bayazitoglu, an analyst at Gelber & Associates, said in the WSJ article.
On Thursday, the U.S. Energy Information Administration will release its reports on natural gas stockpiles, which Donald Murry, an economist at C.H. Guernsey & Co., believes could fall by 15 billion cubic feet to 3.914 trillion, reports Christine Buurma for Bloomberg.