Congrats UNG, the EIA Expects Natural Gas Production to Drop

Good news for the United States Natural Gas Fund, LP (NYSE:UNG), the U.S. Energy Information Administration (EIA) said today it expects domestic natural gas production in 2010 to be down 3% from 2009 levels.

The US Nat Gas Fund (UNG) has managed to comeback 15.8% since Dec 3rd after falling into the mid $8 range.  Today the UNG is at $10.09 a share, its 52-week range runs from $8.50 to $23.33. 

In its January Short-Term Energy Outlook, EIA said it expected marketed natural gas production to be down 1.8 billion cubic feet per day, or 3 percent, this year, primarily due to steep declines from initial production at newly drilled wells and the lagged effect of reduced drilling activity.

EIA also forecast U.S. natural gas consumption this year would average about 62.44 bcf per day, little changed from 2009 demand of 62.45 bcf daily, as growth in residential, commercial and industrial use is offset by declining demand from the electric power sector.

The United States Natural Gas Fund, LP (NYSE:UNG had more than $5.6 billion in cash inflows and the fund finished 2009 with $4.6 billion in assets.  Dare to go long at this point?

SOURCE: http://www.claridenleu.com/research/index.cfm?fuseaction=market.reutnews&MarketID=123&detailType=newsDetail&nid=1263315849nN12196340&lang=en&cfid=350910&cftoken=23607227