Natural gas price movement
This series provides an analysis of natural gas prices and fundamentals. For an in-depth look at natural gas and related companies, sectors, and drivers, please refer to our Energy and Power page.
June natural gas futures increased by 1.17% on Thursday and settled at $2.94 per MMBtu (British thermal units in millions) on May 21, 2015. Prices increased for the first time in last four days—led by increasing gas inventory data. Gas tracking ETFs like the United States Natural Gas Fund LP ETF (UNG) followed the footsteps of natural gas prices in yesterday’s trade. UNG rose by 0.76% and closed at $14.57 on May 21.
On May 21, 2015, the EIA (U.S. Energy Information Administration) published the weekly natural gas report. EIA data showed that gas in storage rose by 92 Bcf (billion cubic feet) for the week ending May 15. A Bloomberg survey estimated an increase of 99 Bcf for the same period. The stockpile increased by 111 Bcf in the week ending May 8. The lower-than-expected inventory increase supported natural gas prices in yesterday’s trade.
The warmer weather forecast was the key driver for natural gas prices in May 2015. As a result, the cooling demand increased. This resulted in an increase in demand for natural gas. The demand for natural gas increased from gas powered power plants and natural gas prices increased. The recent normal weather estimates will curb the short-term demand for natural gas.
This is the fifth up day in the last ten trading sessions. Prices increased by 1.58% more on the up days than on the average down days, over the last ten days. Natural gas futures for June delivery had an average performance with respect to all of the other commodities in yesterday’s trade. Gas prices rose by 3.29% YTD (year-to-date)—led by the warmer weather forecast.
Energy companies like Parsley Energy (PE), Exco Resources (XCO), and Magnum Hunter Resources (MHR), and QEP Energy (QEP) are positively impacted by increasing natural gas prices. They account for 3.15% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). These stocks have a natural gas production mix that’s more than 46% of their production portfolio.