In what could easily be a case of simple profit-taking, some investors are departing from natural gas exchange traded products following the commodity’s jaw-dropping 2014 surge.
The United States Natural Gas Fund (NYSEArca: UNG) and the iPath Dow Jones-UBS Natural Gas Total Return Sub-Index ETN (NYSEArca: GAZ) are two of this year’s best-performing non-leveraged ETPs and although some traders are forecasting additional upside for natural gas, some appear content to depart now before the commodity’s reputation for volatility plays out again. [Nat Gas ETFs Could Have More Upside]
“Long natural gas ETPs saw US$9 million of outflows while short natural gas ETPs recorded US$6.4million of inflows last week on expectations warmer weather will curb demand for gas,” according to a research note by ETF Securities.
Last week’s outflows were seen despite natural gas being the second-best performing commodity for the week behind coffee.
Interestingly, UNG’s shares outstanding count often falls as natural gas futures jump, reports Chris Dieterich for the Wall Street Journal.
Last week, natural gas futures shot above $6 for the first time in four years as another cold winter front moved across the U.S., bolstering natural gas prices. More near-term upside for UNG and GAZ could be in store.