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.

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