Last week saw colder-than-normal weather, a positive for propane companies such as AmeriGas Partners (APU), Ferrellgas Partners (FGP), and Suburban Propane Partners (SPH).
Natural gas prices closed at $4.49 per MMBtu for the week ended March 28, 2014, up from $4.31 per MMBtu the prior Friday.
Cold weather throughout this heating season was the key driver behind higher natural gas prices, and eating degree days were higher than normal last week.
On Friday, March 28, the price of the WTI crude front month contract closed at $101.67 per barrel, compared to $99.46 per barrel the week prior.
Last week, natural gas spot prices traded lower, finishing at $4.33 per MMBtu compared to $4.28 per MMBtu the previous week.
WTI crude prices found support with a bullish inventories figure and continued tension between Russia and Ukraine.
Last week saw slightly colder-than-normal weather, a positive for propane companies such as AmeriGas Partners (APU), Ferrellgas Partners (FGP), and Suburban Propane Partners (SPH).
Despite a colder-than-normal week, the onset of spring and the end of cold weather weighed on natural gas prices. The front month natural gas contract closed at $4.31 per MMBtu last week.
Find out why increasing tension in Eastern Europe should weigh more on Brent crude oil rather than WTI crude oil.
Russia is one of the largest exporters of crude oil in the world. Escalating tensions between Russia and Ukraine have been a recent catalyst in oil prices.
For most investors, the most straightforward way to play natural gas prices is through commodity ETFs or investing in equities that produce natural gas.
On March 20, 2014, the EIA reported that natural gas inventories decreased by 48 bcf (billions of cubic feet) for the week ended March 14, bringing current inventories to 1,001 bcf.
Cold weather is one of the major drivers of propane distributors’ earnings, as the fuel is used for home heating in many areas in the U.S.
Natural gas prices have been extremely volatile lately after a period of stability. Price swings of this nature come either from demand shocks or supply shocks.
On March 19, the DOE reported the inventories data for crude for the week ended March 14. Crude oil inventories increased by 5.85 million barrels.
The warmer-than-normal week that announced the onset of spring and the end of cold weather weighed on natural gas prices.
Natural gas prices have been fluctuating greatly on weather lately, and oil prices may move on geopolitical risk.
While the outlook for global urea prices is neither positive nor negative, fertilizer producers in the United States will continue to benefit from cheap natural gas prices in North America.
Last week, frac spreads traded up slightly, and over the medium term, frac spreads are up significantly. This is a positive catalyst for natural gas processors.
The spread between WTI and Brent crudes closed at $9.68 per barrel on March 14, compared to the spread of $6.42 per barrel for the week ended Mach 7, 2014.