Is Natural Gas Cooling Down?
From Seeking Alpha
By Lior Cohen
The price of natural gas (short term delivery) resumed its downward trend during last week. The recent fall in prices was despite the sharp fall in natural gas storage according to the recent EIA report. Following the recent extraction, the gap between the depletion pace in recent weeks and the five year average has narrowed. Is the natural gas market cooling down? Let’s examine the recent changes in the natural gas market.
During the previous week, the future price of Henry Hub (short term delivery) fell by 3.42%. Moreover, United States Natural Gas (UNG) also decreased by 2.9%. As of last week, the Henry Hub future prices were nearly $1.04 per million BTUs above the price for the same week in 2012. The recent drop in the price of natural gas may have curbed the rally of major natural gas and oil producers’ stocks such Chevron Corporation (CVX): During the previous week, shares of Chevron rose by 0.8%. If natural gas will further decline it could lower the expected revenues of Chevron and thus adversely affect the stock price.
The chart below presents the developments in the price of natural gas between November and January. As seen, natural gas prices changed direction and decreased in recent days.
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