United States Natural Gas Fund LP ( UNG ) shares are trading higher Wednesday as cold weather forecasts drive increased demand for natural gas.

What To Know: According to New York Times, the arctic air mass sweeping across the Central and Eastern United States is expected to bring record-breaking low temperatures and dangerous wind chills, raising concerns about supply disruptions. Freezing conditions could extend as far south as the Gulf Coast, further tightening the market.

Oil prices are also rising, with Brent crude up 0.5% at $76.25 per barrel and WTI crude for March delivery gaining 0.6% to $72.29. The price increase follows concerns about supply disruptions in both the U.S. and Russia. A Ukrainian drone attack on a Russian oil pumping station led to a reduction in flows through the Caspian Pipeline Consortium by up to 40%, equating to a potential loss of 380,000 barrels per day. Meanwhile, extreme cold weather in the U.S. has impacted production in North Dakota, with output estimated to be down by as much as 150,000 barrels per day according to Reuters.

Market sentiment is also being shaped by geopolitical factors. Uncertainty remains over Ukraine peace talks, with President Volodymyr Zelenskiy postponing a trip to Saudi Arabia where discussions with U.S. and Russian officials were expected. A potential ceasefire between Israel and Hamas could reduce geopolitical risks, potentially stabilizing oil prices. Additionally, new tariffs proposed by the Trump administration, including a 25% duty on auto imports, could impact global economic growth and fuel demand.

UNG Price Action: United States Natural Gas shares were up 4.65% at $21.92 at the time of writing, according to Benzinga Pro.

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