US natural gas inventories and weather
US natural gas inventories are 6.9% above their five-year average. They’re also near record levels. For more on inventories, read US Natural Gas Inventories Support Natural Gas Prices. But expectations of cooler weather could support natural gas prices. For more on natural gas prices, read Will the Weather Push US Natural Gas Prices to New Highs? and US Natural Gas Prices Hit a 2016 High: What’s Next?
US natural gas price forecasts
The EIA (U.S. Energy Information Administration) released its monthly Short-Term Energy Outlook (or STEO) report on December 6, 2016. It estimates that US natural gas prices will average $2.49 per MMBtu in 2016 and $3.27 per MMBtu in 2017.
In its previous STEO report, the EIA estimated that US natural gas prices will average $2.50 per MMBtu in 2016 and $3.12 per MMBtu in 2017. US natural gas prices averaged $2.63 per MMBtu in 2015.
The World Bank forecasts that US natural gas prices will average $2.30 per MMBtu in 2016, $3 per MMBtu in 2017, and $3.50 per MMBtu in 2018.
The International Monetary Fund forecasts that US natural gas prices will average $2.30 per MMBtu in 2016, $3 per MMBtu in 2017, $3.10 per MMBtu in 2018, and $3.30 per MMBtu in 2019.
Higher natural gas prices can have a positive impact on the earnings of oil and gas producers such as Rex Energy (REXX), Southwestern Energy (SWN), Antero Resources (AR), Cabot Oil & Gas (COG), and Memorial Resource Development (MRD).
Moves in crude oil and natural gas prices can also impact funds such as the VelocityShares 3x Inverse Natural Gas ETN (DGAZ), the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), the United States Brent Oil ETF (BNO), the United States Oil ETF (USO), the iShares Global Energy ETF (IXC), the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), the First Trust ISE-Revere Natural Gas ETF (FCG), and the Direxion Daily Natural Gas Related Bull 3X ETF (GASL).
Read Winter Weather and Inventories Could Impact Natural Gas Prices, Winners and Losers in Energy after the US Election Results, and Will Crude Oil Prices Test 3 Digits Again? for more on natural gas and crude oil price forecasts.
For related analysis, visit Market Realist’s Energy and Power page.