US natural gas inventories and weather
US natural gas inventories are 2.3% less than the five-year average. Falling natural gas inventories will support natural gas (FCG) (DGAZ) (BOIL) (UNG) prices in the short term. For more on inventories, read Part 3 and Part 4 of this series.
Expectations of cooler weather could support natural gas prices in the short term. For more on natural gas prices and the weather, read Part 1 and Part 2 of this series.
Moves in natural gas prices can impact oil and gas producers’ earnings such as WPX Energy (WPX), Southwestern Energy (SWN), Cabot Oil & Gas (COG), EXCO Resources (XCO), Rex Energy (REXX), and Memorial Resource Development (MRD).
US natural gas price forecasts
Aegent Energy Advisors estimates that US natural gas prices won’t exceed $4.11 per MMBtu (million British thermal units) in January 2017. It also estimates that US natural gas prices won’t exceed $4.1 per MMBtu this winter. US natural gas prices won’t exceed $3.6 per MMBtu between April 2017 and October 2017.
Meanwhile, Donald Trump’s proposed energy policy could impact natural gas prices. Read Winners and Losers in Energy after the US Election Results and How Could Donald Trump Impact the US Energy Market? to learn more.
The EIA (U.S. Energy Information Administration) estimates that US natural gas prices could average $3.27 per MMBtu in 2017. It averaged $2.49 per MMBtu in 2016 and $2.63 per MMBtu in 2015.
The World Bank forecasts that US natural gas prices will average $3 per MMBtu in 2017 and $3.50 per MMBtu in 2018.
The International Monetary Fund forecasts that US natural gas prices will average $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 oil and gas producers’ earnings such as WPX Energy, Southwestern Energy, Cabot Oil & Gas, EXCO Resources, Rex Energy, and Memorial Resource Development.
The ups and downs in crude oil and natural gas prices can also impact funds such as the VelocityShares 3x Inverse Natural Gas ETN (DGAZ), the First Trust ISE-Revere Natural Gas ETF (FCG), the United States Brent Oil ETF (BNO), and the Direxion Daily Natural Gas Related Bull 3X ETF (GASL).
For more on crude oil prices, read What Can Investors Expect in the Crude Oil Market in 2017?, Decoding the World Oil Supply and Demand Gap in 2017, US Election: How Will It Impact the Stock and Energy Markets, Crude Oil Prices Skyrocket as OPEC Agrees to Cut Production, and China’s Crude Oil Imports and Demand Impact Crude Oil Prices.
For more on crude oil price forecasts, read Will Crude Oil Prices Test 3 Digits Again and EIA and Goldman Sachs Upgrade Crude Oil Price Forecasts.
For related analysis, visit Market Realist’s Energy and Power page.