Why ProShares Ultra Bloomberg Natural Gas (BOIL) ETF Is Falling

Shares of ProShares Ultra Bloomberg Natural Gas ETF BOIL, a leveraged ETF designed to amplify natural gas price movements, plunged sharply on Friday as U.S. natural gas prices dropped over 7% to $3.39 per MMBtu at the Henry Hub. The ETF, which magnifies natural gas futures movements by a factor of two, is highly sensitive to price volatility.

What To Know: The price collapse was spurred by milder weather forecasts and a smaller-than-expected inventory withdrawal of 116 Bcf, versus analyst expectations of 127 Bcf. This tempered near-term demand expectations, eroding bullish momentum.

Additionally, updated forecasts for mid-January predict fewer heating degree days, signaling reduced heating demand despite ongoing winter storms. The subdued outlook diminished speculative buying interest in BOIL, which thrives in volatile, bullish environments.

The stock's decline underscores its inherent risk as a leveraged product, amplifying losses during natural gas price pullbacks. Investors should remain cautious as weather-driven demand uncertainty persists.

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Price Action: BOIL shares have tumbled around 10.4% to $50.85 Friday afternoon.

According to data from Benzinga Pro, BOIL has a 52-week high of $203.50 and a 52-week low of $35.70.