Natural gas prices fell to 2012 levels on Friday, down 11% for the week, and the pain continues Monday, as natural gas fell toward a 14-year low.
Natural gas for January delivery slid 5.5% to $1.881 per million British thermal units at recent check. That’s territory that the commodity hasn’t seen since January 2002. If prices held at their lowest Monday levels, natural gas would close around the same price as September 2001.
The plunge comes on another 65-degree day in New York one week before the official start of winter, after record high temperatures were recorded in a number of states from New Jersey to Michigan and Kentucky. Given the unseasonably warm weather, demand for heating oil has slumped, while there remains plenty of natural gas supply.
As for ETFs, The United States Natural Gas Fund (UNG) is falling nearly5% at recent check and it’s off 50% year to date. The three-times leveraged VelocityShares 3x Long Natural Gas exchange-traded note (UGAZ) is down 12.5% in recent trading, and off more than 90% since the start of 2015. By contrast, its opposite leveraged fund, the VelocityShares 3x Inverse Natural Gas ETN (DGAZ), is up 13% and has gained 213% year to date.