The United States is chilling out – literally. The cold snap is pushing natural gas demand up, which has some exchange traded fund (ETF) investors wondering if this presents an opportunity in funds focused on the fuel.
A higher-than-expected supply of natural gas could get used up as downright Arctic weather settles over much of the United States. Could this be the boost that United States Natural Gas (NYSEArca: UNG) needs? [Will the commodity ETFS make a comeback?]
Don Dion for The Street explains that regulators are seeking to rein in “excess speculation” with futures position limits, which could have an impact on UNG. The regulations haven’t yet fully materialized, but UNG’s managers restructured the fund last summer in anticipation. [Natural gas ETF turns to swaps.]
Jeffry Harris, chief economist at the Commodity Futures Trading Commission (CFTC), claimed that he could find a connection between speculation and high energy prices, although United States Commodity Funds Chief Investment Officer John Hyland vigorously defended the funds, calling those claims ‘self-serving statistical gibberish.” [CFTC and commodity ETF provider face off.]