Big Day forNatural Gas ($UNG $CHK)

The natural gas inventory report this morning was better than expected, and there is a huge rally across the natural gas curve (especially the front months). Barron's writes,

"The data is giving gas bears the jitters and is heartening bulls. 'Nobody in the industry was calling 67,' [...]' It was a number that totally shocked people.'"

This is encouraging. You'll notice that there has been a "double bottom" on the September NG contract, or as a correspondent writes in,

"Not merely a double bottom but a higher low in price with a second higher low on the MACD."

Natural gas rig counts have been declining for a long time. Given the production decline rates of conventional and unconventional wells, it is only natural for production to eventually begin declining with a lag after the rig count peak.

It still seems like the CHK/Aubrey debacle in April was the price and sentiment bottom for natural gas.