Will US Natural Gas Futures Test 2016 High?
Natural gas futures and the resistance level
As of May 4, 2017, June natural gas futures are above their 50-day and 200-day moving averages. However, they are below their 20-day and 100-day moving averages. Thus, natural gas (UNG) (UGAZ) (DGAZ) prices may need a catalyst to gain momentum in the upside or downside.
If weather drives demand, prices could even breach the key resistance levels of $3.4 per barrel in the short term. For more on natural gas price drivers and the weather, read part one and part two of this series. Volatility in natural gas prices can impact the earnings of oil and gas producers like Cimarex Energy (XEC), WPX Energy (WPX), EQT (EQT), and Antero Resources (AR).
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US natural gas price forecasts
The U.S. Energy Information Administration estimates that natural gas prices could hit $3.45 per MMBtu by the end of 2017. It expects natural gas prices could average $3.10 per MMBtu and $3.45 per MMBtu in 2017 and 2018, respectively.
Aegent Energy Advisors estimates that US natural gas prices won’t exceed $3.44 per MMBtu in May 2017. It also projects that US natural gas prices won’t exceed $3.56 per MMBtu between May 2017 and October 2017. Prices averaged $2.51 per MMBtu in 2016 and $2.63 per MMBtu in 2015.
A warm summer and a drop in natural gas production could push natural gas prices higher in 2017. However, successful implementation of President Trump’s proposed energy policies could increase US oil and gas production. The rise in production would have a negative impact on natural gas prices.
Read Could Trump Impact US Natural Gas Production and Consumption for more on the natural gas market outlook in 2017. Also, read Hedge Funds Increase Bullish Bets on US Natural Gas for more on the natural gas price forecast.
For more on crude oil prices, read What Can Investors Expect in the Crude Oil Market in 2017 and Why OPEC Needs to Extend Production Cut Deal beyond 2017.
For more energy-related analysis, visit Market Realist’s Energy and Power page.