Natural Gas ETFs Surge on Smallest Inventory Injection in a Decade

Natural gas prices and related exchange traded funds rallied Thursday after the government reported natural gas in storage rose less than expected last week.

On Thursday, the United States Natural Gas Fund (NYSEArca: UNG) increased 8.5% and iPath Bloomberg Natural Gas Subindex Total Return ETN (NYSEArca: GAZ) jumped 15.2%.

Natural gas futures gained 8.7% to $2.89 per million British thermal units, rising the most in four weeks.


Meanwhile, the three-times leveraged-long VelocityShares 3x Long Natural Gas ETN (NYSEArca: UGAZ) advanced 25.3% Thursday while the ProShares Ultra Bloomberg Natural Gas (NYSEArca: BOIL), which takes the two times or 200% daily performance of natural gas, rose 16.5%.

Natural gas prices spiked Thursday after the U.S. Energy Information Administration revealed in its weekly report that that natural gas inventories for the week ended July 22 increased by 17 billion cubic feet to 3.294 trillion, the smallest storage injection for the time of the year since a withdrawal in 2006, reports Naureen Malik for Bloomberg.

In contrast, analysts projected a gain of 26 bcf. Natural gas inventories increased by 34 bcf in the prior week, 49 bcf a year earlier and a five-year average of 52 bcf, according to

Related: Natural Gas ETFs Surge on Bullish Inventory Data

Inventory injections have been trailing historic averages for most of the season, diminishing the supply glut as power generators consume a record amount of fuel while output declines. Consequently, some market watchers are even betting on a possibility of a supply deficit.