Nat-gas Traders Square Off as Inventory Shows below Average Gain (UNG)
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United States Natural Gas ETF (NYSE: UNG) and natural gas futures traded lower early on Thursday ahead of a weekly EIA report on natural gas inventory. Futures prices moved higher early in the week, breaking back above $3 per million btu on expectations of another below average weekly storage build. The numbers were released at 10:30 eastern time and showed inventory gains of 27 bcf, about in line with expectations of 26 bcf.
Today’' print sets the stage for another fight in the futures pits, as bulls and bears square off in the $3 to $3.30 range. The near contract peaked at $3.277 in late July, but since then bulls have been taken out at the knees thanks to reports of reversals in power plant nat-gas/coal switching.
This time around, bulls are armed with new data on rig counts in the U.S., which have declined for the 14th time in 16 weeks. The hope, in the view of bulls, is that the decline in rigs will finally put an end to oversupply of natural gas in the U.S., allowing prices to recover from historic 10-year lows.
On the other hand, bears have already drawn a line in the sand at the previous $3.277 high and they are unlikely to walk away without a fight, say traders.
United States Natural Gas ETF (NYSE: UNG) was lower by 1 percent at 20.36 prior to the inventory print. It now trades at 20.18.
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Today’' print sets the stage for another fight in the futures pits, as bulls and bears square off in the $3 to $3.30 range. The near contract peaked at $3.277 in late July, but since then bulls have been taken out at the knees thanks to reports of reversals in power plant nat-gas/coal switching.
This time around, bulls are armed with new data on rig counts in the U.S., which have declined for the 14th time in 16 weeks. The hope, in the view of bulls, is that the decline in rigs will finally put an end to oversupply of natural gas in the U.S., allowing prices to recover from historic 10-year lows.
On the other hand, bears have already drawn a line in the sand at the previous $3.277 high and they are unlikely to walk away without a fight, say traders.
United States Natural Gas ETF (NYSE: UNG) was lower by 1 percent at 20.36 prior to the inventory print. It now trades at 20.18.
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