Natural gas prices, along with the commodity-related exchange traded fund, surged Monday on speculation that the U.S. would suffer through another week of lingering summer heat.
The United States Natural Gas Fund (NYSEArca: UNG) rose 4.1% Monday. Despite the summer rebound, UNG is still down 5.3% year-to-date.
Meanwhile, natural gas futures were 3.9% higher to $2.907 per million British thermal units.
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The natural gas trade has legs as warmer weather conditions would fuel natgas demand for electricity generation.
“We’re certainly looking at, in part, weather-related trade with warmer weather in the East,” Tony Headrick, an energy analyst at CHS Hedging, told the Wall Street Journal.
Moreover, Headrick pointed out that recent data revealed a smaller-than-expected increase in the amount of natural gas in storage, which further supported prices.[related_stories]