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US Natural Gas Futures: What to Expect This Spring

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US Natural Gas Futures: What to Expect This Spring PART 1 OF 8

US Natural Gas Prices Are near a 1-Week Low

Natural gas prices  

US natural gas (FCG) (UNG) (DGAZ) futures contracts for May delivery fell 0.8% and settled at $3.15 per MMBtu (million British thermal units) on April 20, 2017. The S&P 500 (SPY) (SPX-INDEX) rose 0.76% on April 20, 2017. Oil and gas are major parts of the energy sector. The energy sector contributed to ~6.6% of the S&P 500 as of April 14, 2017.

US natural gas prices are near a one-week low due to the following factors:

  • larger-than-expected rise in US natural gas inventories
  • mild weather

However, US natural gas prices have risen ~20% after hitting a three-month low in February 2017 due to the rise in natural gas exports to Mexico and fall in natural gas inventories in February 2017 and March 2017.

Volatility in natural gas prices impacts natural gas–weighted upstream companies such as Rice Energy (RICE), EXCO Resources (XCO), and Antero Resources (AR).

US Natural Gas Prices Are near a 1-Week Low

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US natural gas highs in the last 15 months  

US natural gas (BOIL) (GASL) active futures hit $3.99 per MMBtu on December 28, 2016. It was the highest level in the last 25 months. Prices rose due to the following:

As of April 20, 2017, prices were 21.1% below their 15-month high. They fell due to warmer-than-normal weather for this time of year. For more on how the weather impacted natural gas prices, read the next part of this series.

US natural gas lows in the last 15 months  

US natural gas prices hit a 17-year low of $1.68 per MMBtu on March 4, 2016, due to mild weather, weak demand, strong supplies, and high inventories. We’ll cover more bearish drivers in the rest of this series. As of April 20, 2017, prices have risen 87.5% from their lows on March 4, 2016. They have risen ~12.4% in the last 12 months.

What’s in this series?  

In this series, we’ll look at US weather, natural gas inventories, and natural gas price forecasts. We’ll also look at US natural gas rig counts, production, and consumption.

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