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US Natural Gas Prices Are near a 2-Month High

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Natural gas prices 

US natural gas (UNG) (BOIL) (UGAZ) futures contracts for May delivery fell 1.2% and settled at $3.1 per MMBtu (million British thermal units) on March 30, 2017. Prices fell despite bullish natural gas inventory data. Broader markets like the S&P 500 (SPY) (SPX-INDEX) also rose 0.3% on March 30, 2017. Oil and gas are major parts of the energy sector. The energy sector contributed to ~6.5% of the S&P 500 as of March 24, 2017.

US natural gas prices are near a two-month high due to the following factors:

  • cold weather
  • fall in US natural gas inventories in the last few weeks
  • short covering

Prices have risen after hitting a three-month low in February 2017. Moves in natural gas prices impact natural gas–weighted upstream companies like Rice Energy (RICE), Gulfport Energy (GPOR), and Cabot Oil & Gas (COG).

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US natural gas highs in the last 12 months 

US natural gas (DGAZ) (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 March 30, 2017, prices were 20% 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 

US natural gas prices hit a 17-year low of $1.68 on March 4, 2016, due to mild weather, weak demand, strong supplies, and high inventories. Follow the series for more bearish drivers. As of March 30, 2017, prices have risen 90.5% 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, and consumption.

We’ll start with US natural gas prices during the early morning hours on March 31, 2017.

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