Natural Gas Investments

Natural gas storage numbers were released yesterday. Please note the red curve in the chart below.



Please note the red circle. If we get another injection in the next 2 weeks, the storage curve will breach the 5 year average channel.

The numbers were, simply put, awful. With an unexpected injection of 3Bcf reported yesterday, natural gas inventories took a sharp turn upward and are approaching the top of the 5 year channel. The price of gas near futures currently is $3.75. A 2 handle ($2) is in theory possible.


Here is the seasonality chart:



This is the price over the last 9 years:



UNG chart show below:




Note also that the seasonal nature of natural gas is changing as more gas is used for summer power generation. So further sharp price deterioration is not a given, but price increases seem very unlikely.