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US Natural Gas Futures: Key Moving Averages and EIA’s Forecast

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Natural gas futures and the resistance level 

As of May 11, 2017, June natural gas futures are above their 20-day, 50-day, 100-day, and 200-day moving averages of $3.24, $3.21, $3.24, and $3.16 per MMBtu (million British thermal units).

As a result, there could be more bullish momentum for US natural gas (UNG) (BOIL) (FCG) prices. If the weather drives demand, prices could even breach the resistance level of $3.5 per barrel in the short term. For more on natural gas price drivers and the weather, read Part 1 and Part 2 of this series. Changes in natural gas prices can impact oil and gas producers’ earnings like Newfield Exploration (NFX), Cimarex Energy (XEC), WPX Energy (WPX), and Memorial Resource Development (MRD).

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US natural gas price forecasts 

The EIA released its monthly STEO (Short-Term Energy Outlook) report on May 9, 2017. It estimates that prices could average $3.17 per MMBtu in 2017, which is 2.4% higher than previous estimates. The EIA estimates that prices could average $3.43 per MMBtu in 2018, which is 1% lower than previous estimates. Prices averaged $2.51 per MMBtu in 2016 and $2.63 per MMBtu in 2015.

Aegent Energy Advisors estimates that US natural gas prices won’t exceed $3.56 per MMBtu between May 2017 and October 2017.

Impact 

A warm summer and lower natural gas production could push natural gas prices higher in 2017. However, successful implementation of President Trump’s proposed energy policies could increase US oil and gas production. The rise in production would have a negative impact on natural gas prices.

Read Hedge Funds Increase Bullish Bets on US Natural Gas for more on the natural gas price forecast.

For more on crude oil prices, read US Crude Oil Futures: Why the Recovery Could Be Short-Lived and Why OPEC Needs to Extend Production Cut Deal beyond 2017.

For more energy-related analysis, visit Market Realist’s Energy and Power page.

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