But don't get too excited because this rise might encounter a little whack-a-mole reaction in the next six months. If nothing else, we might see a ceiling pretty soon. Utilities have been the savior for natural gas of late as gas prices are much cheaper than coal. But over time this will equalize because most utilities have long-term coal purchase contracts that often require minimum purchases. As a result, coal will keep piling up at utilities and it won't make sense to keep buying gas, no matter how cheap it is.
The big unknown is what happens leading up to the end of the storage season in October. Will gas production and new drilling continue to be limited so that the current storage level tracks back closer to historical averages? It will be white knuckle ride until cool weather comes back. But the good news is that gas gets a "do over" next winter. Even if storage maxes out, the storage level will only be about 5% above historical levels at the beginning of the withdrawal season and a cold winter can bring it back to "normal" (I say "normal" because gas is compared to five year averages, which because of shale drilling are much higher than previous norms). The bad news is that it will be a painful ride to get there.
Last month, I mocked T. Boone Pickens for calling a bottom for gas in the $1.90/MMBtu range. I admit that I was wrong about that in the short term, but I still say that what happens in late summer/fall is unknowable. Prices might hold around $2/MMBtu or they might fall through the floor if utilities' appetite for gas is sated. We might be in for a shock, or $2 might be a good floor.