Thursday, September 10, 2009

Natural Gas Report: 6 Weeks to Overflow of Capacity

Weekly inventory numbers were relased today showing an injection of 69Bcf. Natural gas in storage continues to be significantly higher than last year (17%) and than the 5-year average (17.4%).

At the current rate, storage capacity will overflow in approximately 6 weeks. However, the key is "at the current rate". In the coming weeks there maybe very little use of natural gas for heating or cooling, injections may be considerably higher. Thus, overflow could be hit much sooner. Next two weeks will tell.

Contrary to what the press says, production continues to be very healthy:

Today's gas action is a prime opportunity to sell any longs. As of 2:21PM UNG is up 8.10%, and is up 23.7%. Keep in mind that UNG is still broken and may be getting its new swaps very soon, at that point, the price premium over NAV will drop. Lots of opportunity here! Please do your DD.

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