Extreme Cold Watch Sends NatGas Futures Soaring, Puts BOIL ETF In Focus Amid 65% Weekly Surge

An incoming Arctic blast has sent natural gas prices skyrocketing, fueling outsized gains in BOIL.

• According to the National Weather Service, beginning Thursday, a strong area of high pressure in western Canada will bring a frigid Arctic air mass.
• The National Weather Service said the coldest wind chills may drop to minus 50 degrees Fahrenheit across the Northern Plains.
• BOIL ETF's top holding is Natural Gas Futures (NG1), with a nearly 172% weightage.

A natural gas exchange-traded fund is attracting heightened retail-trader attention as tighter supplies of the fuel ahead of a severe weather event have pushed prices higher.

ProShares Ultra Bloomberg Natural Gas (BOIL) was up 8% at $29.07 in overnight trading on Wednesday, according to Yahoo Finance, following three straight sessions in the green. The ETF is up nearly 65% this week and almost 18% this year.

A cold blast sweeping across the eastern United States, along with forecasts calling for even colder conditions, has driven expectations of increased demand for heating fuel, lifting natural gas prices and boosting interest in the leveraged exchange-traded fund.

A user on Stocktwits noted that BOIL could break in the $31 to $33 as the weather gets even colder on the East Coast.

What's The Winter Storm Watch?

According to the National Weather Service, beginning on Thursday, a strong area of high pressure in western Canada will bring a frigid Arctic air mass, with frigid, below-average temperatures expanding from the Northern Plains into the Southern Plains and across the majority of the Central and Eastern U.S. by the weekend.

"This will be accompanied by gusty winds, leading to dangerous wind chills. The coldest wind chills may fall below -50F across the Northern Plains, with sub-zero wind chills reaching as far southeast as the Mid-Atlantic states and Southern Plains," the National Weather Service said.

BOIL Simmering On NatGas Surge

The ETF's top holding is Natural Gas Futures (NG1), with a nearly 172% weightage, according to Koyfin data. NG1 jumped 10% to $5.35 as of 1:42 p.m. ET on Thursday and has gained 45% so far this year, outpacing even gold and silver futures.

According to global capital markets commentator The Kobeissi Letter, natural gas prices have extended gains to over 75% in the past three days amid the Arctic blast spreading across the United States. "This marks the largest 3-day gain in history," it posted on X.

How Are Retail Traders Reacting?

Stocktwits sentiment on BOIL was in 'bullish' territory, down from 'extremely bullish' a day ago, with message volume at 'extremely high' levels, rising over 13% over the past month. The ETF's following meanwhile has risen by over 2% in the past 30 days.

On the other hand, sentiment on ProShares UltraShort Bloomberg Natural Gas (KOLD), an ETF that benefits from natural gas prices falling, witnessed retail sentiment jump to 'extremely bullish' from 'bullish' a week ago, with message volumes at 'extremely high' levels. KOLD shares were down 6.5% in overnight trading.

Some Stocktwits users are expecting February to be warmer and are trading KOLD, with one user noting they opened a KOLD position at $21.

Shares of BOIL closed up 20% on Wednesday, and KOLD stock was down 19.6%.

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