NYMEX-traded natural gas futures contracts for January delivery have been trading within a close channel of $2.2 per MMBtu (British thermal units in millions) and $2.3 per MMBtu for the past four days. Prices see strong resistance at $2.3 per MMBtu. The record inventory has been swinging natural gas prices.
Support and resistance
Lower natural gas prices could support consumption. The demand from power plants could also support natural gas prices. Natural gas prices could see resistance at $3 per MMBtu. Prices tested this mark in April 2015. A cold winter could benefit natural gas prices. Record natural gas inventory and record production will drag natural gas prices lower. The prices could see support at $2 per MMBtu. The prices tested this mark in October 2015.
Natural gas price forecast
The EIA (U.S. Energy Information Administration) estimates that US natural gas prices could average around $2.69 per MMBtu in 2015 and $3 per MMBtu in 2016. The prices are below their 20-day, 50-day, and 100-day moving averages as of November 26, 2015. The price chart and moving averages suggest that prices could trade lower. Citigroup estimates that natural gas prices could average around $2.70 per MMBtu in 2015 and $3 per MMBtu in 2016.
Weak demand cues and lower natural gas prices could impact US natural gas producers like Cimarex Energy (XEC), Cabot Oil & Gas (COG), Newfield Exploration (NFX), and Range Resources (RRC). The uncertainty in the energy market also impacts ETFs like the PowerShares DB Energy ETF (DBE) and the PowerShares DWA Energy Momentum ETF (PXI).