Natural gas prices are up 4.3% today, at $2.54/thousand cubic feet, after falling to near $2.45 yesterday. The market for natural gas hasn’t changed that much, with warm weather still prevailing across much of the US and driving down demand for heating.
Today’s move up is the result of short covering following the recent decline in natural gas prices. Another factor is likely the cutback in natural gas production announced earlier this year by Chesapeake Energy Corp. (NYSE: CHK). The company announced yesterday that it would sell at least $10 billion in assets to bring its cash flow in line with its capital spending.
Chesapeake also sold $1.3 billion in senior unsecured notes this morning. The notes are due in 2019 and carry a coupon of 6.775%. The notes are rated ‘Ba3’ by Moody’s and ‘BB+’ by S&P.