United States Natural Gas (UNG) changed direction and added 4.8% during the past week. Despite this recent recovery, UNG was still down by 8.3% during last month. Was the recent recovery marks a shift in trend? Or will UNG resume its downward trend?
Following the recent rally, the gap between the natural gas prices and UNG widened. This gap could further expand if the Contango in the future markets continues.
The U.S. natural gas underground storage grew by 87 Bcf – higher than the five-year average. The table below shows the changes in the price of natural gas, U.S. storage shifts, the 5-year average and last year’s injections.
Despite the high injection, the price of UNG rallied during last week. The current expectations are for the natural gas storage to remain well below average, despite the faster than normal injection pace.
The rest of this analysis is at Seeking Alpha