July natural gas futures are trading close to the key support level. Prices settled at $2.81 per MMBtu (British thermal units in millions) on June 19, 2015. Natural gas prices have been fluctuating between $2.60 and $3 per MMBtu. The rising natural gas stockpile will continue to put pressure on natural gas prices.
Support and resistance
Natural gas prices could move in either direction. The bulls could see key resistance at $3.20 per MMBtu. Prices hit this level in January 2015. The rising demand from power plants and warm weather forecast could push natural gas prices. In contrast, bears could see the next support at $2.50 per MMBtu. Gas prices tested this level in April 2015. Mild weather estimates might push natural gas prices lower.
Natural gas charts suggest that prices could fluctuate between $2.50 and $3 per MMBtu levels in the short term. The market consensus suggests that gas prices could average around $3 per MMBtu in 2015. July gas futures are trading above their 50-day moving average, but below their 100-day moving average.
ETFs like the VelocityShares 3X Long Natural Gas ETN (UGAZ) and the United States Natural Gas Fund LP (UNG) benefit from the rising natural gas prices. They are also positive for oil and gas producers like Occidental Petroleum (OXY), Concho Resources (CXO), and EOG Resources (EOG). They account for 2.78% of the Spider Oil and Gas ETF (XOP). These companies’ production portfolios have a 41% natural gas production mix.