Natural gas 5% above its 17-year low
Natural gas (DGAZ) futures hit a 17-year low of $1.611 on March 4, 2016, and since then have moved 5% upside and closed at $1.69 on March 7. Natural gas futures were trading 8% below the 20-day moving average and 21% below its 100-day moving average on March 7. On March 4, natural gas futures touched a high of $1.675 but closed at $1.66.
However, on March 7, it managed to move close to the psychological level of $1.70. In the last two trading sessions, natural gas was consolidating around $1.66–$1.69. Since March 2, when it broke below $1.70, it has remained below this psychological level for the last three consecutive trading sessions.
The United States Natural Gas ETF (UNG) was 9% below its 20-day moving average and 27% below its 100-day moving average. Upstream stocks Rice Energy (RICE) and Ultra Petroleum (UPL) were 8.4% and 62%, respectively, below their 100-day moving averages. However, Antero Resources (AR) and Exco Resources (XCO) were 5% and 49%, respectively, above their 100-day moving averages.
RICE and UPL operate with a respective production mix of 99.4% and 92.6% in natural gas. AR and XCO operate with a production mix of 80% and 88.6%, respectively, of natural gas.
In the next part of this series, we will discuss the ongoing bullish trends in the upstream companies.