Natural gas exchange traded funds surged Thursday as freezing winter conditions help support greater heating demand.
On Thursday, the United States Natural Gas Fund (NYSEArca: UNG) rose 7.1% and United States 12 Month Natural Gas Fund (NYSEArca: UNL) added 2.9% as Nymex natural gas futures advanced 7.3% to $2.93 per million British thermal units.
Cold weather across the northern tier of the U.S. spread to the East Cost this week and is expected to remain frigid into early January, supporting the rise in heating demand, reports Patti Domm for CNBC.
“This is a substantial strengthening in the heating demand outlook. The cold weather system that was supposed to be limited to the northern Midwest has spread to the eastern part of the country,” John Kilduff, partner at Again Capital, told CNBC.
Natural gas prices finally snapped losses, which were dragged down by an abundance of supply, especially with heating demand depressed in an unusually warm early winter months.