Natural gas price movement
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 natural gas futures contracts for October delivery fell slightly by 0.31% and closed at $2.569 per MMBtu (British thermal units in millions) on September 23, 2015. The consensus of the rising crude oil inventory is weighing on natural gas prices. Gas tracking ETFs like the United States Natural Gas Fund LP ETF (UNG) moved in the opposite direction of natural gas prices. UNG rose slightly by 0.08% and closed at $12.13 on September 23, 2015.
On September 24, 2015, the EIA (U.S. Energy Information Administration) is scheduled to release the weekly US commercial natural gas stockpile report. Last week, the natural gas in storage rose by 73 Bcf (billion cubic feet) for the week ending September 11, 2015. Bloomberg surveys estimate that the natural gas in storage could rise by 99 Bcf for the week ending September 18, 2015. The estimates of the rising natural gas in storage could negatively impact natural gas prices.
Mild weather is expected across the East Coast of the US during the last week of September, according to Commodity Weather Group. Mild weather could curb the cooling needs. As a result, the demand for natural gas could drop. This could be negative for natural gas prices.
Natural gas prices fell for the fifth time in the last ten days. During the same period, prices fell by 0.61% more on the average up days than on the average down days. October natural gas futures contracts were the worst performers with respect to other commodities in Wednesday’s trade. Prices fell more than 11% YTD (year-to-date) due to the record natural gas stockpile.
The roller coaster ride of natural gas prices impacts natural gas producers like Cabot Oil & Gas (COG), Antero Resources (AR), and EXCO Resources (XCO). Together, these companies account for 2.61% of the SPDR Oil and Gas ETF (XOP). These companies’ natural gas production mix is greater than 86% of their production portfolio.