Natural Gas Climbs Back Up to $4 – will it remain there?

The natural gas heated up again last week. The price of the Henry Hub rallied by 5.8% and passed the symbolic $4 mark for the first time since mid-July. Moreover, the natural gas ETF United States Natural Gas (UNG) and natural gas related companies including Chesapeake Energy (CHK) and Anadarko Petroleum (APC) also rallied last week. Will natural gas remain at its high level for a long time? Let’s examine the main developments in the natural gas market.

Storage builds up

The EIA reported last week the injection to storage was 75 Bcf; the underground natural gas storage came to 2,630 Bcf, which is still 15.7% below the 5-year average. The recent injection to storage was around 3 Bcf below the average market expectations. This may have pulled back up natural gas prices by the end of last week. Last year’s injection was 67 Bcf and the 5-year average injection was 58 Bcf.

The rest of this analysis is at Seeking Alpha

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