Natural gas prices
US natural gas (BOIL) (UNG) (DGAZ) futures contracts for June delivery fell 0.2% and were trading at $3.37 per MMBtu (million British thermal units) in electronic trading at 6:05 AM EST on May 12, 2017. Prices are near a three-month high. Broader markets such as the S&P 500 (SPY) (SPX-INDEX) and the NASDAQ are trading near all-time highs. Bullish momentum in the US stock market could support natural gas demand and prices. For more on natural gas prices and drivers, read Part 1 of this series.
Moves in natural gas prices impact natural gas producers’ earnings like Southwestern Energy (SWN), Range Resources (RRC), and Memorial Resource Development (MRD).
The northeastern parts of the US will experience cold weather for the next few days. Warm weather is expected in the southeastern parts of the US for the next week. Overall, the weather is expected to be mild in May 2017.
Changes in the weather impact the heating and cooling demand for natural gas (UGAZ) (FCG) and influence prices. About 50.0% of US households use natural gas for heating and cooling purposes. Warm summers and cold winters drive the demand for natural gas. Demand tends to be lower during the spring season, which usually lasts until late June 2017. Changes in demand impact inventories.
In the next part of this series, we’ll take a closer look at US natural gas inventories.