Traders capitalized on the the decade low prices, which helped boost natural gas prices, along with the related exchange traded funds.
The U.S. Natural Gas Fund (NYSEArca: UNG) was up 4.8% Monday.
U.S. natural gas futures increased for the second straight day as traders speculate on the oversold conditions in the natural gas market, reports Joe Silha for Reuters.
Last week, natural gas prices dipped below $2, the first time in over a decade. On Monday, gas prices were trading back above $2, up 4.2%.
“The market was oversold. The cash market seems to be stabilizing and we’re also expecting a low storage injection next week, which may be providing some support,” Steve Platt, analyst at Archer Financial in Chicago, said in the Reuters article.
Nevertheless, few expected a better upside without hotter weather to generate higher electricity for air-conditioning demand.
On Monday, ConocoPhillips (NYSE: COP) announced it will shut down U.S. natural gas production due to the low commodity prices, reports Fox Business.