Natural gas prices and related exchange traded fund surged Thursday on a lower-than-expected U.S. supply injection over the past week, fueling concerns that inventories will remain low through spring and summer.
The United States Natural Gas Fund (NYSEArca: UNG) rose 3.9% Thursday. UNG has jumped 21.9% year-to-date, following strong demand in response to the polar vortex storms over winter.
NYMEX natural gas futures increased 4.5% Thursday, trading around $4.73 per million British thermal units.
Natural gas prices are hovering around a one-month high after government data showed producers only added 24 billion cubic feet of natural gas for the week ended April 11, below the 34 bcf average forecast and lower than the average for this time of year, reports Timothy Puko for the Wall Street Journal.
John Woods, a natural gas trader, argued that the extended cool weather most likely contributed to diverting natural gas intended for inventories and into homes.
The smaller-than-expected injection is raising concerns that producers will not be able to replace what was used up over the winter months before the next heating season, with gas storage bottoming to a 11-year low last month. [Summer Shortfall Could Bolster Natural Gas ETFs]