Behind The Natural Gas ETF Surge

Aggressive traders can consider the three-times leveraged-long VelocityShares 3x Long Natural Gas ETN (NYSEArca: UGAZ) and the ProShares Ultra Bloomberg Natural Gas (NYSEArca: BOIL), which takes the two times or 200% daily performance of natural gas.

“Standing in stark contrast to the bullish fundamental backdrop and positive price action described above are fund flows for UNG,” said Schaeffer’s. “Over the course of the fund’s year-long slump in 2017, the ETF netted inflows of $338.04 million, per data. However, since the reverse split was enacted after the close on Jan. 4, UNG has netted $150.46 million in outflows — effectively wiping out about 45% of last year’s net inflows.”

The cold weather could finally trigger increased heating demand across the nation. Around half of U.S. homes utilize natural gas for heat, driving up prices during the winter months when temperatures fall. Last month, the U.S. Energy Information Administration has revealed that natural gas inventories fell by 69 billion cubic feet or 1.8% to 3,626 Bcf on December 1–8, 2017.

For more information on the natgas market, visit our natural gas category.