Winter Chill Heats up Natural Gas ETFs

With expectations in place for a cold winter, natural gas and the related exchange traded products are heating up. The United States Natural Gas Fund (NYSEArca: UNG) is up more than 10% this week, stoking increased activity in the heavily natural gas fund.

A weather system will push across the northern U.S. over the next several days, bringing rain and snow, which could raise heating demand or demand for natural gas. Natural gas prices typically rise ahead of the winter as cold weather fuels indoor-heating demand. The November through march months have traditionally been the seasonal heating period when demand for U.S. gas consumption is at its peak.

“The $350 million United States Natural Gas Fund LP, or UNG, saw 8.8 million shares worth $253 million change hands on Monday. That marks its largest daily volume since February and more than three times the average daily traded value for the past year,” reports Bloomberg.

Action in Natural Gas Prices

Rising production out of the shale industry may cap natural gas prices. Genscape Inc. said its daily pipeline flow estimate revealed that the lower 48 states’ production setting a new record.