Weather Could Drive Natural Gas Prices This Week
Natural gas prices
US natural gas (UNG) (FCG) futures for May delivery are near a two-month high. Broader markets such as the S&P 500 (SPY) (SPX-INDEX) and Dow Jones are trading near all-time highs. Bullish momentum in the US stock market could support natural gas demand and prices. For more on natural gas prices and drivers, read the previous part of this series.
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The latest forecasting models suggest that there will be rain and snow showers for the next few days in some parts of the US. Warm weather is expected in the Southern plains. The western part of the US is expected to have mild weather. Overall, the weather is expected to be mild this week and for the rest of April 2017.
Changes in the weather impact the heating and cooling demand for natural gas (BOIL) (GASL) and influence prices. About 50.0% of US households use natural gas for heating and cooling purposes. Cold winters and warm summers drive the demand for natural gas. Changes in demand impact inventories.
In the next part of this series, we’ll take a closer look at US natural gas inventories.