"Natural gas: commodity market’s ‘sleeping giant’"

The demand side is on the come in transportation fueling but the supply side has already begun a very tiny decline and if the producers weren't in such tough shape that they have to hedge at $4.00 so they aren't forced to sell if the market dipped to $3.00 we'd probably be at $4.25 right now.
From MarketWatch:

As the winter season draws to a close and the energy market readies for a slowdown in the need for heating fuels, natural-gas prices should be falling. They’re not. Instead, prices have climbed over 9% month to date, with the market betting on a tighter supply and demand situation following a cold winter season, signs of a recovery in the U.S. economy, a drop in drilling rigs, growing uses for the fuel, and a shift away from coal-fired plants.

“Demand on a massive scale is coming,” said Kevin Kerr, president and chief executive offer of Kerr Trading International. 

“Supplies are getting tighter and demand is increasing,” he said, and that’s likely to happen dramatically in the next five years as new technology and usage comes online. “Natural gas is like a sleeping giant, waiting to be awakened.” 

On Thursday, prices got a good shake, with April natural gas NGJ13 +1.99%  jumping nearly 4% to $3.81 per million British thermal units, the highest settlement since Nov. 27. The United States Natural Gas Fund UNG +3.85%  , an exchange-traded fund that tracks movements in natural-gas prices, has rallied 9.7% month to date.

The rally followed a U.S. Energy Information Administration report showing a bigger-than-expected 145 billion-cubic-foot drop in weekly natural-gas supplies, which took total supplies below 2 trillion cubic feet for the first time since mid-May 2011. Inventories are down 440 billion cubic feet from the year-ago level.

“Weather, of course, is a big factor and impacts prices weekly,” said Greg Renwick, president and CEO of East West Petroleum Corp. CA:EW -1.43% . 

Over the long term, however, natural gas is expected to be used in other industries, such as vehicle transportation, he said. Economic growth and prices of competitive fuels will also be key factors on the demand side for natural gas, he said, while production levels and volume in storage are key on the supply end. 

And in the U.S., analysts have seen overall improving economic conditions, bigger-than-usual production declines and total supply levels in storage at their lowest in nearly three years.

Supply and demand 
So far, demand growth has at least been able to keep up with growing production in the U.S....MORE 

The futures are in slight contango from front month ($3.88) to August ($4.01).
After a dip in the September's ($3.992) the curve is modestly upward, not looking for any dramatic changes in the supply demand/balance.