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Analysts Are Bullish about US Natural Gas Prices in 2017

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Nov. 20 2020, Updated 1:21 p.m. ET

Natural gas inventories  

US natural gas inventories are 6.3% higher than their five-year average. However, the surplus is shrinking. If the trend continues, the surplus could turn into a deficit—particularly if the winter is harsh. A harsh winter can cause prices to rise sharply. For more on US natural gas prices, read Part 2 of this series.

Higher natural gas prices have a positive impact on oil and gas producers’ earnings such as WPX Energy (WPX) and Memorial Resources (MRD).

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US natural gas price forecasts  

Aegent Energy Advisors estimates that US natural gas prices are expected to trade below $3.27 per MMBtu (million British thermal units) this winter from November 2016 to March 2017.

Asset management company AllianceBernstein estimates that US natural gas prices would average $2.5 per MMBtu in 2016, $3.5 per MMBtu in 2017, and $3 per MMBtu in 2018, respectively.

The EIA (U.S. Energy Information Administration) estimates that US natural gas prices would average $2.42 per MMBtu in 2016 and $2.87 per MMBtu in 2017.

The International Monetary Fund forecasts that US natural gas prices would average $2.3 per MMBtu in 2016, $3 per MMBtu in 2017, $3.1 per MMBtu in 2018, and $3.3 per MMBtu in 2019, respectively.

Higher natural gas prices have a positive impact on oil and gas producers’ earnings such as WPX Energy (WPX), Antero Resources (AR), Gulfport Energy (GPOR), and Memorial Resources (MRD).

Natural gas prices also impact funds such as the VelocityShares 3x Inverse Natural Gas ETN (DGAZ), the First Trust ISE-Revere Natural Gas ETF (FCG), and the Direxion Daily Natural Gas Related Bull 3X Shares ETF (GASL).

For more on natural gas price forecast, read Winter Weather and Inventories Could Impact Natural Gas Prices.

For related analysis, you can visit Market Realist’s Energy and Power page.

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