Natural gas prices rise
This series analyzes natural gas prices and fundamentals. For an in-depth fundamental look at oil and gas and related companies, sectors, and drivers, please refer to our Energy and Power page.
NYMEX-traded September natural gas futures contracts rose by 1.18% and settled at $2.75 per MMBtu (British thermal units in millions) on August 3, 2015. Gas prices rose due to warm weather estimates. ETFs like the United States Natural Gas Fund LP ETF (UNG) followed the price trajectory of natural gas prices. UNG rose by 1.23% and settled at $13.20 on August 3, 2015.
Commodity Weather Group reported that extremely hot weather is expected over the southern parts of the US over the next two weeks. Warm weather estimates might continue to support natural gas prices. Mild weather is estimated across the East Coast and the Midwestern parts of the US over the next week.
Last week, the EIA (U.S. Energy Information Administration) reported that the gas inventories rose by 52 Bcf (billion cubic feet) for the week ending July 24, 2015. The consensus of rising inventories could continue to negatively impact natural gas prices.
Natural gas prices rose for the fifth time in the last ten days. Prices fell by 1.51% more on the down days than on the up days, over the last ten trading sessions. Natural gas prices fared well against all of the other commodities in yesterday’s trade. Prices fell by 3.77% YTD (year-to-date)—led by oversupply concerns.
The long-term lower natural gas prices impact upstream producers like Chesapeake (CHK), Rice Energy (RICE), and Southwestern Energy (SWN). They account for 2.74% of the SPDR Oil and Gas ETF (XOP). These companies’ natural gas production mix is greater than 35% of their total production.