October natural gas (UNG) (UGAZ) (DGAZ) futures were above their 20-day and 50-day moving averages of $2.95 per MMBtu (million British thermal units) and $2.97 per MMBtu on August 31, 2017. However, they’re below their 100-day and 200-day moving averages of $3.1 per MMBtu and $3.2 per MMBtu. Moving averages suggest that prices could be range bound between the 50-day and 200-day moving averages. However, prices could trade higher if the production outage, discussed in Part 2, continues due to Hurricane Harvey.
Volatility in natural gas (FCG) (GASL) prices impacts natural gas exploration and production companies like Gulfport Energy (GPOR), Newfield Exploration (NFX), EQT (EQT), and Memorial Resources (MRD).
US natural gas price forecasts
Aegent Energy Advisors estimates that US natural gas prices won’t exceed $3.06 per MMBtu between September and October.
The EIA (U.S. Energy Information Administration) estimates that US natural gas prices could average $3.06 per MMBtu in 2017—1.4% lower than previous estimates. The EIA also estimates that prices could average $3.29 per MMBtu in 2018—3.2% below previous estimates. Prices averaged $2.51 per MMBtu in 2016 and $2.63 per MMBtu in 2015.
The World Bank estimates that prices could average $3.17 per MMBtu in 2017 and $3.60 per MMBtu in 2018.
The rise in US crude oil production would add to US natural gas supplies. The rise in associated natural gas production would pressure natural gas prices.
Read Why Hedge Funds May Be Turning Bearish on US Crude for more information on crude oil price forecasts.
For more on crude oil, read How India’s Crude Oil Imports, Production, and Demand Impact Prices and How Harvey, OPEC, and US Rigs Are Driving Crude Oil Futures.