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Looking Ahead: Natural Gas and Crude Oil Prices Next Week

PART:
1 2 3 4 5
Part 2
Looking Ahead: Natural Gas and Crude Oil Prices Next Week PART 2 OF 5

Natural Gas Futures Could Maintain Bullish Momentum

Natural gas futures  

US natural gas (GASL) (UNG) futures contracts for August delivery fell 1.6% to $3.04 per MMBtu (million British thermal units) on June 29, 2017. Prices fell due to profit-booking. However, prices have risen 8.5% since June 22, 2017. Prices are near a four-week high due the following:

  • an expectation of warm summer next month
  • a less-than-expected rise in natural gas inventories on June 16–23, 2017
  • a rise in US natural gas exports to Mexico on June 22–28, 2017

Natural Gas Futures Could Maintain Bullish Momentum

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Higher natural gas prices have a positive impact on natural gas producers like Rex Energy (REXX), EXCO Resources (XCO), and Antero Resources (AR).

Broader market

The S&P 500 (SPY) (SPX-INDEX) fell 0.86% to 2,419.7 on June 29, 2017. Likewise, the energy sector fell 0.19% on June 29, 2017. So far, SPY has risen 8.1% in 2017. The energy sector has fallen 14.13% YTD. The energy sector is limiting upside for the S&P 500 in 2017.

Natural gas highs and lows in the last 15 months 

Natural gas active futures hit $3.99 per MMBtu on December 28, 2016—the highest level in more than two years. On the other hand, it hit a 17-year low of $1.68 per MMBtu on March 4, 2016.

August natural gas futures are above their 20-day moving average of $3.02 per MMBtu (million British thermal units) as of June 29, 2017. However, they’re below their 50-day, 100-day, and 200-day moving averages of $3.21, $3.23, and $3.24 per MMBtu as of June 29, 2017. It suggests that natural gas prices could trade lower or be range bound next week.

In the next part of the series, we’ll analyze what to expect from US weather.

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