$3 Proves to be Hamburger Hill for Natural Gas Traders (UNG)
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Last week natural gas inventory increased by a slightly higher than forecast amount - 33 bcf vs. 26 bcf expected. Weekly storage builds have trended well below the seasonal norm for 10 straight weeks, and this has natural gas bulls licking their chops.
Natural gas prices are off their yearly lows and broke into the $3 handle briefly earlier this week. Since then, prices have trended lower and now trader near $2.90, as bears, armed strong fundamental data, fight their hearts out to defend $3.00.
$3.00 is the price where natural gas/coal switching starts to get shaky, according to analyst reports this week. As a result, it is proving to be the battle ground for bulls, who are targeting $4, and bears, who want it back under $2.50.
With production, rig count, and storage still at highs, UNG bulls have their work cut out for them, at least in the short term. However, on a longer term horizon, bulls may have the upper hand as demand for natural gas grows.
United States Natural Gas Fund, LP (NYSE: UNG) is lower by 3.5 percent intraday on Thursday. The selloff began immediately after the inventory report was released.
Natural gas prices are off their yearly lows and broke into the $3 handle briefly earlier this week. Since then, prices have trended lower and now trader near $2.90, as bears, armed strong fundamental data, fight their hearts out to defend $3.00.
$3.00 is the price where natural gas/coal switching starts to get shaky, according to analyst reports this week. As a result, it is proving to be the battle ground for bulls, who are targeting $4, and bears, who want it back under $2.50.
With production, rig count, and storage still at highs, UNG bulls have their work cut out for them, at least in the short term. However, on a longer term horizon, bulls may have the upper hand as demand for natural gas grows.
United States Natural Gas Fund, LP (NYSE: UNG) is lower by 3.5 percent intraday on Thursday. The selloff began immediately after the inventory report was released.
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