The ProShares UltraShort Bloomberg Natural Gas ETF (KOLD) is experiencing a significant uptick, driven by a confluence of factors affecting the natural gas market. As of January 20, 2025, natural gas futures have been under pressure, sinking towards $3.75/MMBtu. This decline is attributed to forecasts of warmer weather following an Arctic blast, which has eased demand for heating. Additionally, the anticipation of regulatory changes under the Trump administration, including potential increases in domestic energy output, has contributed to the bearish sentiment. The market is also reacting to a significant withdrawal of 258 billion cubic feet of gas from storage, which, while exceeding expectations, has not been enough to counteract the overall downward pressure on prices.
Further compounding the situation, U.S. LNG cargoes have been diverted to Europe due to higher European gas prices, as Asian demand weakens amid high inventories. This shift in trade patterns underscores the current volatility in the global natural gas market. The combination of these factors has led to a decrease in natural gas prices, with the underlying security price of NG=F dropping by 3.80% to $3.80.
The KOLD ETF has surged to $32.40, marking a 15.22% increase from its previous close.