Nat-gas Inventory Drops but Storage Seen as a Problem (UNG)
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United States Natural Gas Fund, LP (NYSE: UNG) is in play today following a weekly report from the EIA. Today's report showed a 39 bcf increase in inventory last week. This compares to expected builds of 44 bcf, according to a Reuters poll.
Storage rose by 90 bcf in the same week last year, while the five-year average build for that week is 79 bcf. Warmer weather and lower natural gas prices are driving stronger demand for natural gas this year, and this is being reflecting in the lower weekly inventory data. Disruptions from Tropical Storm Debbie are being reflected in last week’s inventory data.
Prior to the data release, natural gas futures were trading lower by over 1.25 percent, but prices are only slightly off recent highs at just under $3 per million BTU, and are back on the move following the inventory data.
Depressed prices in natural gas has made UNG a favorite trade for both long term and short term investors. United States Natural Gas Fund, LP (NYSE: UNG) is higher by 18 percent in the past month, in-line with moves in the futures market. However, many natural gas traders are concerned that storage gluts could drive prices back down later this summer, especially if demand dips. In the meantime, traders are looking for any reason to go long.
Storage rose by 90 bcf in the same week last year, while the five-year average build for that week is 79 bcf. Warmer weather and lower natural gas prices are driving stronger demand for natural gas this year, and this is being reflecting in the lower weekly inventory data. Disruptions from Tropical Storm Debbie are being reflected in last week’s inventory data.
Prior to the data release, natural gas futures were trading lower by over 1.25 percent, but prices are only slightly off recent highs at just under $3 per million BTU, and are back on the move following the inventory data.
Depressed prices in natural gas has made UNG a favorite trade for both long term and short term investors. United States Natural Gas Fund, LP (NYSE: UNG) is higher by 18 percent in the past month, in-line with moves in the futures market. However, many natural gas traders are concerned that storage gluts could drive prices back down later this summer, especially if demand dips. In the meantime, traders are looking for any reason to go long.
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