The natural gas market has surged over the summer on unusually hot weather that bolstered demand for electricity for air conditioning – about 50% of U.S. households utilize natural gas for heating and cooling. However, the weather conditions are expected to change ahead as temperatures ease.
SEE MORE: Summer Fun for Natural Gas ETFs
The natgas market has been closely tracking weather projections in recent weeks as traders tried to price a shifting outlook on early summer electricity demand for air conditioning. Gas typically dips to a seasonal low during the spring’s mild temperatures before hot summer weather raises demand for gas-fired electricity generation.
“The rise in interest rates has taken its toll on interest rates sensitive sectors over the past two months, and the increase in commodity prices, has added pressure to utility shares, with the XLU falling 10% from its midsummer peak,” adds Seeking Alpha.
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Utilities Select Sector SPDR (NYSEArca: XLU)
