The price of natural gas continued its downward trend during last week. United States Natural Gas (UNG) also followed and declined last week. According to the recent U.S Energy Information Administration weekly update, last week’s natural gas injection was higher than the five year average. Will the natural gas market continue to cool down? Let’s examine the recent changes to the natural gas market.
During last week, the price of Henry Hub (short term delivery) declined again by 2.6%. Further, United States Natural Gas also dropped by 2.7%. As of last week, the Henry Hub price remained $0.79 per million BTUs higher than price during the same week in 2013. Last week’s drop in price may have partly contributed to the fall of natural gas related companies such as Chesapeake Energy (CHK): During last week, Chesapeake Energy’s stock fell by 7.3%.
According to EIA’s recent weekly update, the underground natural gas storage grew by 105 Bcf and reached 1,160 Bcf. In comparison, during last year, the storage increased by 99 Bcf; the five years average injection was 82 Bcf. Therefore, last week’s injection was higher than normal. The current storage for all lower 48 states is still 40.5% lower than last year’s storage and 45.3% below the 5-years average.
The rest of this analysis is at Seeking Alpha
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