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US Natural Gas Futures Recovered from a 3-Month Low

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Natural gas futures  

NYMEX natural gas (GASL) (DGAZ) futures contracts for July delivery rose 4.3% and settled at $3.06 per MMBtu (million British thermal units) on June 15, 2017. It’s the highest settlement since May 31, 2017. Prices rose due to a less-than-expected rise in US natural gas inventories.

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Natural gas futures and the broader market 

Natural gas prices rose from a three-month low on June 14, 2017. The rollercoaster ride in natural gas prices impacts on oil and gas producers like Gulfport Energy (GPOR), Newfield Exploration (NFX), and Memorial Resources (MRD).

The S&P 500 (SPY) (SPX-INDEX) fell 0.2% to 2,432.46 on June 15, 2017. The S&P 500 hit an intraday high of 2,445.7 on June 9, 2017—the highest level ever. Bullish momentum in SPY could drive the US energy market. Crude oil and natural gas are major parts of the energy sector. The energy sector accounts for ~5.9% of SPY as of June 15, 2017. It accounted 6.3% of SPY as of May 25, 2017.

Natural gas highs and lows in the last 15 months 

NYMEX natural gas (UNG) (FCG) active futures hit $3.99 per MMBtu on December 28, 2016—the highest level in more than two years. As of June 15, 2017, US natural gas active futures were 23.4% below their 2016 high. Mild weather and the expectation of a rise in production are pressuring natural gas prices.

US natural gas active futures hit a 17-year low of $1.68 per MMBtu on March 4, 2016. As of June 15, 2017, prices have risen 81.9% from lows in March 2016.

In the next part of the series, we’ll look at US weather and how it impacts natural gas prices.

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