Natural gas and the S&P 500 Index
For the week ended July 8, 2016, August natural gas futures (UNG) (FCG) (UGAZ) (DGAZ) (BOIL) fell by 6.2%. The S&P 500 Index (SPY) (QQQ) (IVV) rose by 1.3%. Among the SPDR ETFs, the Health Care Select Sector SPDR ETF (XLV) and the Consumer Discretionary Select Sector SPDR ETF (XLY) rose the most.
Between July 1 and July 8, 2016, XLY rose by 2.2%, and XLV rose 2.1% as investors turned defensive following the United Kingdom’s vote to exit the European Union. The returns of the SPDR ETFs are adjusted for dividends.
Natural gas and crude oil
Crude oil futures (USO) (USL) fell by 7.3% in the week ended July 8, 2016. On July 7, crude oil futures fell 4.8% after oil inventories fell by 2.2 million barrels in the week ended July 1. The market had expected a far larger number following the American Petroleum Institute’s outsized number of a 6.7 million barrel draw.
On July 7, the EIA (U.S. Energy Information Administration) announced a 39 Bcf (billion cubic feet) addition to natural gas (UNG) (GASL) inventories for the week ended July 1. Analysts had expected an addition of 44 Bcf, according to a survey by the Wall Street Journal.
The fall in natural gas prices could be a key catalyst for natural-gas-weighted stocks such as Gulfport Energy (GPOR), Comstock Resources (CRK), Abraxas Petroleum (AXAS), Range Resources (RRC), Antero Resources (AR), Rex Energy (REXX), Contango Oil & Gas (MCF), and Ultra Petroleum (UPL).