After the sweltering summer heat, natural gas prices are hovering around this year’s highs on lower-than-expected U.S. stockpiles. Now, natural gas exchange traded funds investors are waiting on the winter chill.
The United States Natural Gas Fund (NYSEArca: UNG) was up 4.0% Thursday. Since the April low of $14.25 per share, the fund is up 62.9%. The fund is now trading above its 200-day exponential moving average.
Natural gas futures were up 3.7% Thursday, trading around $3.6 per million British thermal units.
The U.S. Energy Information Administration revealed that domestic gas inventories increased rose last week by 72 billion cubic feet to 3.725 trillion cubic feet, well below market expectations, reports Joe Silha for Reuters. [Natural Gas ETFs Heat Up as Market Moves into Backwardation]
“It was a bullish (EIA) number, and it now looks like inventories will end the injection season not that much above last year,” Dominick Chirichella at Energy Management Institute, said in the Reuters article. “We could still see prices correct, but I don’t think it will last long.”
Inventories are still at record highs for this time of year and could end the stock-piling season above last year’s all-time high of 3.852 trillion cubic feet. However, this is still below the EIA’s 4.239 trillion cubic feet estimate for capacity.
Observers are now weighing on winter temperature projections, with the government calling for temperatures 20% colder than last year.