Will Natural Gas Keep Descending?

The natural gas market continues to lose steam as its price slowly declined during last week. United States Natural Gas (UNG) also fell last week. According to the latest U.S Energy Information Administration weekly update, last week’s natural gas injection was slightly higher than the five year average. Will natural gas keep falling? Let’s analyze the recent developments in the natural gas market.

During the previous week, the price of Henry Hub (short term delivery) fell by 2%. Moreover, United States Natural Gas also decreased by 1.8%. As of last week, the Henry Hub price still $0.41 per million BTUs above the price during the same week in 2013. Last week’s fall in the price of natural gas may have curbed down the rally of shares of natural gas related companies such as Chesapeake Energy (CHK): During last week, Chesapeake Energy’s stock rose by 2.2%.


Based on the EIA’s recent weekly update, the underground natural gas storage increased by 49 Bcf and reached 899 Bcf. In comparison, last year, the storage rose by 30 Bcf; the five years average injection was 43 Bcf. Thus, last week’s injection was slightly higher than normal. The current storage for all lower 48 states is still 48% lower than last year’s storage and 52.9% below the 5-years average.

The rest of this analysis is at Seeking Alpha

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