Natural Gas Prices Pare Losses as Residence in North Crank Up Thermostats
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After a tough week, natural gas bulls went on the offensive this morning, armed with bullish weekly inventory data. After posting a small gain previously, weekly inventory data from the EIA today showed natural gas stockpiles declined 82 bcf last week. In response, gas prices rose to $3.44 per million btu, and the popular ETF, United States Natural Gas (NYSE: UNG), jumped 3.3 percent.
The drop in inventory signals a shift into the heart of the winter heating season, which ends fear over an inventory supply glut, at least for the time being. Traders continue to call attention to UNG's high correlation to weather forecasts, with any drop in temps seen as decidedly negative. On the other hand, after last year's unusually warm winter, a return to normal would likely be healthy for prices.
The drop in inventory signals a shift into the heart of the winter heating season, which ends fear over an inventory supply glut, at least for the time being. Traders continue to call attention to UNG's high correlation to weather forecasts, with any drop in temps seen as decidedly negative. On the other hand, after last year's unusually warm winter, a return to normal would likely be healthy for prices.
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