Natural gas prices rally
July natural gas futures contracts trading in NYMEX rose by 3.26% on Thursday. Prices closed at $2.85 per MMBtu (British thermal units in millions) on June 25, 2015. The consensus of slowing production supported natural gas prices. ETFs like the United States Natural Gas Fund LP ETF (UNG) mirrored natural gas prices in yesterday’s trade. UNG rose by 2.54% and settled at $13.72 on June 25.
Yesterday, the EIA (U.S. Energy Information Administration) released its weekly natural gas in storage report. Natural gas in storage rose by 75 Bcf (billion cubic feet) for the week ending June 19, 2015. Wall Street analysts estimated a rise of 80 Bcf over the same period. The lower-than-expected inventory rise supported natural gas prices.
The demand from power plants boosted natural gas prices. As a result, the inventories fell for the week ending June 19, 2015. Market experts suggest that higher natural gas prices could also lower the natural prices in the short term.
Natural gas prices rose for the fifth time in the last ten days. Prices rose by 0.81% more on the up days than on the average down days, over the same period. Gas futures contracts for July delivery were among the top performers in yesterday’s trade. Prices fell more than 3% YTD (year-to-date)—led by mild weather.
Upstream players like Antero Resources (AR), Ultra Petroleum (UPL), and Cimarex Energy (XEC) are impacted by the volatility in natural gas prices. They account for 3.37% of the Spider Oil and Gas ETF (XOP). These companies also have a gas production mix that’s greater than 43% of their total production.