Frigid weather conditions sweeping across the United States are driving natural gas futures higher, impacting the ProShares UltraShort Bloomberg Natural Gas ETF (KOLD). As of January 6, 2025, forecasts predict temperatures plunging up to 20°F below normal, with ice storms and heavy snow expected to disrupt power lines and travel, particularly in the Ohio Valley and Missouri. This extreme cold is anticipated to make January the coldest since 2011, significantly boosting demand for natural gas and diesel. The surge in natural gas prices is further supported by increased gas flows to U.S. LNG export plants, following the end of a Russia-Ukraine pipeline deal.
The underlying natural gas futures have jumped to $3.62/MMBtu, marking an 8.06% increase. This rise in natural gas prices has led to a decline in KOLD, which inversely tracks the performance of natural gas futures. The ETF is currently priced at $44.31, down 6.97% from its previous close.