Huge drawdown in natural gas storage: UNG jumps, contango situation good

There was a very large draw down of natural gas shown by the storage report to: -243Bcf, bringing the amount in storage sharply down to 2.71Bcf.

As a result, UNG spiked up 2%, the chart looks good:

The current situation with contango, which is the UNG's natural destroyer, is that there is no contango or backwardation until April or May contracts, then contango starts, 2% by July, and 11% by December:

So the contango status is good for UNG, not so good for UNL since it uses different future months, but on the other hand prices are not forecasted to rise much. This is a double edge sword. Either way, UNG loses. Historically speaking, however, the current status is very good for UNG as there is no immediate contango. Buying UNG is basically betting on natural gas prices going up, and that is fair. The big draw down today also helps.