Natural gas prices stop the losing streak
July natural gas futures contracts trading on NYMEX halted a five days losing streak and gained marginally within the downtrend channel on June 1, 2015. Mild weather and slowing demand are driving natural gas prices in the short term.
Support and resistance
Bearish sentiments, oversupply concerns, and rising inventory estimates may drive natural gas prices to the nearest support of $2.50 per MMBtu (British thermal units in millions). Prices hit this mark in April 2015. In contrast, bullish traders could see resistance at $3.20 per MMBtu. Prices tested this level in January 2015.
Natural gas prices are expected to average around $2.93 per MMBtu in 2015 and $3.32 per MMBtu in 2016, respectively, according to EIA (U.S. Energy Information Administration) forecasts. The downtrend channel suggests that gas prices could fluctuate between $2.50 and $3 per MMBtu in the near term.
Likewise, upstream stocks like EOG Resources (EOG), Occidental Petroleum (OXY), and Chevron (CVX) also benefit from higher natural gas prices. Combined, these stocks account for 3.31% of the Spider Oil and Gas ETF (XOP). Their production portfolios have a 41% natural gas production mix.