ETF Trends
ETF Trends
  • Natural gas futures and commodity-related ETFs have been rallying since the start of March
  • After touching a 17-year low on March 3, natural gas futures have rallied on bets that prices have fallen too low
  • Moreover, some argue that natural gas demand for electricity generation could be even higher this summer

Natural gas futures and commodity-related exchange traded funds have been rallying since the start of the month as traders bet that the recent selling pressure will attract bargain hunters and trigger production cuts ahead of the summer heat.

Natural gas futures continued to gain momentum, rising for the seventh time in eight sessions. Nymex natural gas futures were up 1.0% Tuesday to $1.838 per million British thermal units, or 12.1% higher since its March 3 low.

Meanwhile, the United States Natural Gas Fund (NYSEArca: UNG) rose 2.0% and the iPath Bloomberg Natural Gas Subindex Total Return ETN (NYSEArca: GAZ) gained 0.4% On Tuesday. Since the March lows, UNG increased 10.5% and GAZ jumped 24.4%.

The three-times leveraged-long VelocityShares 3x Long Natural Gas ETN (NYSEArca: UGAZ) also 6.0% Tuesday while the ProShares Ultra Bloomberg Natural Gas (NYSEArca: BOIL), which takes the two times or 200% daily performance of natural gas, advanced 2.7%.

After touching a 17-year low on March 3, natural gas futures have rallied on bets that prices have fallen too low, too quickly and on a turn toward hotter weather ahead in spring and summer when demand for cooling picks up, reports Timothy Puko for the Wall Street Journal.

“This market appears poised for a pause following the dramatic price decline,” Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates, told the WSJ.

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