Natural gas and the S&P 500 Index
For the week ended June 17, 2016, July natural gas futures (UNG) (FCG) rose by 2.6%. The S&P 500 Index (SPY) (QQQ) fell by 1.2%. Among the SPDR ETFs, the Utilities Select Sector SPDR ETF (XLU) rose the most. Between June 10 and June 17, XLU rose by 0.77%.

The Fed kept the key interest rate unchanged on June 15. This followed weak US non-farm payroll data on June 3. The lack of a rise helped utility stocks to gain. Lower interest rates make utility stocks attractive.

Why Natural Gas Keeps Outperforming Broader Markets, Crude Oil

Natural gas and crude oil
Crude oil futures (USO) fell by 2.2% for the week ended June 17, 2016. On June 8, crude oil futures were at their 2016 high after oil inventories fell by 3.2 million barrels for the week ended June 3.

However, in the previous week, the rise in oil rigs had kept oil prices lower. On June 17, oil rigs rose for the third consecutive week.

Why natural gas beat the broader market and crude oil
Last week, July natural gas futures contracts (GASL) (FCG) rose by 2.6%. The rise in natural gas prices was due to higher temperatures, which boosted natural gas usage for cooling purposes. Natural gas futures fell by 0.6% following the higher level of inventory additions.

On June 16, the EIA (U.S. Energy Information Administration) announced an addition of 69 Bcf (billion cubic feet) to natural gas inventories for the week ended June 10, 2016. This was higher than the estimated 66 Bcf.

The rise in natural gas prices could be a key catalyst for natural gas–weighted stocks such as Gulfport Energy (GPOR), Comstock Resources (CRK), and Ultra Petroleum (UPL).