Investment thesis
Since our last publication on the Velocity Shares 3x Long Natural Gas ETN (UGAZ), our bearish view on the ETF has not materialized, as the molecule market slightly tightened, following warmer-than-average temperatures that enhanced the U.S. gas demand.
Yet, in spite of that, we maintain our bearish view on UGAZ and believe that domestic gas supply is set to surge, with the return of the geopolitical oil premium.
Besides, the appreciation of the complex is mostly artificial and is propelled by a short-covering rally that is out of steam.
While the