Though natural gas exchange traded funds (ETFs) are down today, the markets are betting that it won’t be the case for long.

Hedge funds and other large speculators raised their net-long positions, or wagers on rising prices, in four gas contracts by 94% in the seven days ended Jan. 4, reports Asjylyn Loder for Bloomberg. [Drilling Bans Could Boost Natural Gas ETFs.]

Why are they so bullish when funds like United States Natural Gas (NYSEArca: UNG) are down nearly 2% today?

Stockpiles of natural gas are down, and demand is rising, making the perfect equation for ETF investors this winter. More than 50% of this country’s homes use natural gas for their heat. Throw in forecasts for lower output, and it’s a recipe for a continued rise in prices.

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