May Natural Gas Futures Trade Flat – Alon USA Surges More than 8%

Natural gas price movement

Below is our natural gas—crude or precious metals—price and fundamental analysis. For an in-depth look at natural gas and related companies, sectors, and drivers, please refer to our Energy and Power page.

The consensus of huge supply buildup and colder weather estimates led to a flat trading session for May natural gas futures. Gas futures increased and settled up by 0.19% at $2.644 MMBtu (British thermal units in millions). However, the United States Natural Gas Fund LP (UNG) was down by 0.45%. It closed at $13.27 on March 30. UNG tracks the performance of natural gas futures.

May Natural Gas Futures Trade Flat – Alon USA Surges More than 8%

Last week, the EIA (U.S. Energy Information Administration) reported that weekly natural gas inventories increased by 12 Bcf (billion cubic feet) for the week ending March 20, 2015. This marks an early end to the winter season and short-term supply pressures on prices.

Price analysis suggests that the market is already bracing for a reason to find new lows. In light of heightened anxiety in the commodity markets, natural gas producers’ stocks rose with the strong performance of the S&P 500. The current trend in natural gas equities diverging from the underlying commodity is continuing.

Alon USA (ALJ), Magnum Hunter Resources (MHR), and Synergy Resources (SYRG) surged more than 5% each in yesterday’s trade. Currently, Synergy Resources (SYN) has 16 “buy” recommendations from analysts. It has a median price estimate of $15 per share. It settled at $12.10 on Monday. These companies account for about 3.26% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).

Over the last ten days, May natural gas futures were trending lower. The average down days were 1.36% more than the up days over the same period. Natural gas prices fared relatively well against all commodities on March 30. However, natural gas spot prices declined 8.58% YTD (year-to-date) in 2015, following its long-term downward trend.

May Natural Gas Futures Trade Flat – Alon USA Surges More than 8%

The demand from industrials gained marginally on March 30. In contrast, the demand from residential dropped on the same day. These fundamentals and the charts suggest that the short-term price movement is expected to be between the support and resistance level of $2.6 MMBtu and $2.75 MMBtu for natural gas.