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How Did Natural Gas, Crude Oil, and SPY Fare Last Week?

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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.

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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.

Last week, between July 1 and July 8, natural gas futures contracts (GASL) (GASX) (FCG) fell by 6.2%. The fall in natural gas prices was due to production and demand concerns.

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).

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