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NYMEX Natural Gas Prices Recover from a 3-Month Low

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Natural gas prices 

NYMEX April natural gas (DGAZ) (UNG) (BOIL) futures contracts rose 1% and closed at $2.78 per MMBtu (million British thermal units) on February 24, 2017. Broader markets like the S&P 500 (SPY) (SPX-INDEX) also rose 0.1% on February 24, 2017.

Natural gas prices recovered from a three-month low due the following factors:

  • expectation of cold weather
  • better-than-expected fall in natural gas inventories
  • short covering

High natural gas prices have a positive impact on natural gas–weighted upstream companies like Antero Resources (AR), Gulfport Energy (GPOR), Rice Energy (RICE), and Southwestern Energy (SWN).

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US natural gas highs in the last 12 months  

NYMEX natural gas (UGAZ) (FCG) active futures hit $3.99 per MMBtu on December 28, 2016—the highest level in the last 25 months.

Prices rose due to:

As of February 24, 2017, prices were 30.3% below their 12-month highs. Prices fell due to warmer-than-normal weather for this time of the year. For more on the weather, read the next part of the series.

US natural gas lows in the last 12 months  

NYMEX natural gas prices hit a 17-year low of $1.64 on March 3, 2016, due to mild weather, weak demand, strong supplies, and high inventories.

Read How Could Donald Trump Impact the US Energy Market? for more on bearish drivers in 2017. As of February 24, 2017, prices have risen 70% from their lows in the last 12 months.

What’s in this series?  

In this series, we’ll look at natural gas inventories, US natural gas rig counts, production, consumption, and some natural gas price forecasts.

We’ll start with US natural gas prices during the early morning hours on February 25, 2017.

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