U.S. Natural Gas Fund (NYSEArca: UNG) fell 4% in the first hour of U.S. trading Monday on predictions weather in the U.S. will heat up and curb demand for the commodity.
Natural gas futures dropped to a two-week low on revised forecasts for mild mid-February weather, Bloomberg News reports.
Weather Group LLC forecasts above-normal temperatures in the eastern half of the U.S. from Feb. 7 through Feb. 11.
“The revised forecasts came in warmer and that’s putting some pressure on the market,” said Tom Doremus, an analyst at Tradition Energy in Stamford, in the report. “We’re seeing some near-term relief from last week’s cold.”
UNG, the natural gas ETF, was down for the third straight session after encountering resistance at its 50-day moving average.