April natural gas (UGAZ) (FCG) (DGAZ) futures contracts fell 2.7% and settled at $2.9 per MMBtu (million British thermal units) on March 16, 2017. Broader markets like the S&P 500 (SPY) (SPX-INDEX) also fell 0.2% on March 16, 2017. Oil and gas are major parts of the energy sector. The energy sector contributed to ~6.5% of the S&P 500 as of March 17, 2017.
NYMEX natural gas prices fell from a one-month high due to the following factors:
However, prices have risen 13% from their three-month low of $2.6 per MMBtu on February 21, 2017. Volatility in natural gas prices impacts natural gas–weighted upstream companies like Rice Energy (RICE), Rex Energy (REXX), EXCO Resources (XCO), and Southwestern Energy (SWN).
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Prices rose due to:
As of March 16, 2017, prices were 27.3% below their 12-month highs. Prices fell due to warmer-than-normal weather for this time of the year. For more on the weather, read the next part of the series.
US natural gas prices hit a 17-year low of $1.68 on March 4, 2016, due to mild weather, weak demand, strong supplies, and high inventories. Follow the series for more bearish drivers. As of March 16, 2017, prices have risen 72.6% from their lows in the last 12 months.
In this series, we’ll look at natural gas inventories, US natural gas rig counts, production, consumption, and some natural gas price forecasts.