Natural Gas Prices Remain Flat Despite Strong Storage Buildup

The price of natural gas rallied last week, as the Henry Hub rose by 1.7%. Nonetheless, the Henry Hub is nearly flat on a monthly scale (up to date). Moreover, since the beginning of the month, United States Natural Gas (UNG) inched up by 0.5%. Will natural gas prices resume its downward trend in the near term?

Last week’s rally in price of natural gas may have contributed to the modest gains of natural gas producers stocks such as Chesapeake Energy (CHK) and Anadarko Petroleum (APC) as they rose by 1.8% and 1.4%, respectively.

The storage keeps picking up at a fast pace

According the latest EIA weekly report, the injection to storage was 88 Bcf; the underground natural gas storage reached 2,555 Bcf – nearly 16% below the 5-year average. Last week’s injection was 31 Bcf or 54% higher than last year’s injection and 83% above the 5-year average. If this high rate injection continues, we could see the storage reaching 3,900 Bcf by the beginning of November.

The rest of this analysis is at Seeking Alpha

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