Natural Gas Rally Crumbles; Support Holds Near $4 (UNG)
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Investors in United States Natural Gas ETF (NYSE: UNG) suffered losses on Thursday when the price of natural gas dropped by over six percent. Gas futures opened at approximately $4.31 per million btu but dropped to a low near $4, where support was seen.
The drop was triggered by weekly EIA data on Thursday morning that showed a larger than expected build in inventory. Data showed stockpiles grew by 43 bcf, exceeding survey estimates that called for a buildup of only 29 bcf. Investors had been optimistic on natural gas given cooler than average spring temperatures, but bullish sentiment evaporated quickly and traders were quick to take profit.
From a technical perspective, a close above $4 may signal overall sentiment remains positive, say traders. Year-to-date, United States Natural Gas ETF (NYSE: UNG) is higher by 28 percent.
The drop was triggered by weekly EIA data on Thursday morning that showed a larger than expected build in inventory. Data showed stockpiles grew by 43 bcf, exceeding survey estimates that called for a buildup of only 29 bcf. Investors had been optimistic on natural gas given cooler than average spring temperatures, but bullish sentiment evaporated quickly and traders were quick to take profit.
From a technical perspective, a close above $4 may signal overall sentiment remains positive, say traders. Year-to-date, United States Natural Gas ETF (NYSE: UNG) is higher by 28 percent.
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