Is Natural Gas Ready to Retest $3?
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United States Natural Gas ETF (NYSE: UNG) was trading slightly higher prior to the release of inventory data by the EIA. Stockpiles rose 28 bcf last week, slightly less than analyst estimates of 33 bcf. Following the release of the data, natural gas futures were little changed, hovering around $2.8 per million btu. Operations in the gulf returned to normal after shut-ins caused by Hurricane Issac, and there was little damage reported as a result of the storm.
Most traders are skeptical that Natural gas will perform well above $3. Mild weather and power plant swapping into coal will likely keep prices depressed in the near term, say traders. Natural gas bulls are pointing to data that shows a decline in the number of rigs in the Unites States, which hit a 13-year lows. While bullish for natural gas, so far there is little evidence of a drop in production.
Most traders are skeptical that Natural gas will perform well above $3. Mild weather and power plant swapping into coal will likely keep prices depressed in the near term, say traders. Natural gas bulls are pointing to data that shows a decline in the number of rigs in the Unites States, which hit a 13-year lows. While bullish for natural gas, so far there is little evidence of a drop in production.
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