Natural Gas Prices Poised to Takeout 2013 Highs (UNG)

March 7, 2013 2:31 PM EST
Natural gas priced tapped 6-week highs on Thursday. Gains follow EIA inventory data this morning, which showed a larger than expected drawdown.

Inventories declined 146 bcf compared to estimates of 132 bcf. The decline was well above average and takes total inventory to 2 trillion bcf, 14.8 percent higher than the 5 year average for this time of year.

After experiencing one of the warmest winters on record last year, natural gas prices slide to 10-year lows. This combined with technology gains in production caused havoc for gas prices.

On the weather front, for now pain has subsided, but traders are likely to keep a close eye on forecasts and inventory data going forward. Traders will also be watching key technical levels, as gas futures look poised to takeout 2013 highs at $3.64, which could pave the way for prices to climb to $4 per million btu.

Natural gas futures trade near $3.60 per million btu mid-day on Thursday. The related ETF, United States Natural Gas (NYSE: UNG), gained 3 percent.

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