Natural gas inventory levels in Western Canada are at 492.46Bcf as of
August 23 and now exceed the existing storage capacity of 489Bcf.
Natural gas in Canada is performing even worse than in the US (see Gas.to vs UNG). Current prices are already below $2, prices not seen since 2002.
FirstEnergy Capital, an energy advisory based in Calgary has issued a warning that prices could fall below $1 in coming weeks, according to Canwest news service.
The firm says that Canadian supplies "continue to drift lower" but there is no evidence of large scale shut-ins occurring. Inventory levels in western Canada are at 492.46Bcf as of August 23 and now exceeed the existing storage capacity of 489Bcf.
Also with regards to GAS.to, the natural gas ETF in Canada that is underperforming UNG in the US, Claymore has responded to me on the reasons, which were as we had previously stated:
"GAS follows the AECO price for Natural Gas whereas UNG follows the NYMEX. Although the commodity is the same, they are different hubs and currencies. Both would have an effect as to how closely the two track one another.
The fund rolls forward contracts over a five day period, seven days before month end. This is done on a monthly basis. The fund rolls the contracts 20% per day over five days. "
What Claymore does not mention is the other reason , UNG is overpriced dues to its shares issuance problems and is comanding a premium over NAV.
Keep your eyes on Gas.to for a possible preview of UNG future prices.