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Natural Gas Is Trading Flat due to a Warm Weather Forecast

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Natural gas settles unchanged

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

Natural gas futures for May delivery settled unchanged at $2.51 per MMBtu (British thermal units in millions) on Tuesday, April 13, 2015. Gas prices didn’t change because warm weather estimates curbed the demand for natural gas. ETFs tracking the performance of natural gas like the United States Natural Gas Fund LP ETF (UNG) fell marginally by by 0.16% at the end of trade. UNG closed at $12.59 on Tuesday, April 13.

Last week, the EIA (U.S. Energy Information Administration) reported that weekly gas in storage rose by 15 Bcf (billion cubic feet). These figures were better than the market consensus of 11 Bcf. The rise in inventory implies weak demand and oversupply concerns in the short term.

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Gas prices settled unchanged for the first time in the last ten days. Over the last ten trading sessions natural gas prices fell for five trading days. The average down days fell 0.95% more than the average up days during this period. Lead was the top performer among all of the commodities on April 13. Natural gas prices had a mediocre performance compared to other commodities in yesterday’s trade. Gas prices fell almost 13% YTD (year-to-date)—led by the oversupply of natural gas.

Oil and gas ETFs like the Spider Oil and Gas ETF (XOP) and the Energy Select Sector SPDR ETF (XLE) fell marginally by 0.84% and 1% in yesterday’s trade. Companies like Ultra Petroleum (UPL), Antero Resources (AR), and Range Resources (RRC) have a natural gas production mix greater than 65%. Natural gas prices directly impact these companies’ returns. These stocks account for 3.18% of XOP.

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