Natural gas prices and related ETFs surged Monday as traders anticipate rising heating demand in cooler winter months ahead.
On Monday, the United States Natural Gas Fund (NYSEArca: UNG) gained 5.2% and the iPath Bloomberg Natural Gas Subindex Total Return ETN (NYSEArca: GAZ) rose 4.0% as natural gas futures added 5.3% to $3.14 per million British thermal units.
Traders also capitalized on the turning sentiment with leveraged long ETFs. For instance, three-times leveraged-long VelocityShares 3x Long Natural Gas ETN (NYSEArca: UGAZ) surged 15.3% Monday while the ProShares Ultra Bloomberg Natural Gas (NYSEArca: BOIL), which takes the two times or 200% daily performance of natural gas, advanced 9.4%.
Natural gas futures strengthened as traders reacted to bullish weather forecasts for most of the U.S. over the next coming weeks, which should fuel heating demand. Natgas prices typically rise ahead of the winter as colder weather adds to heating demand, with November through March as the peak period for U.S. gas consumption, according to Investing.com.
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