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US Natural Gas: Will It Maintain the $3 Mark?

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Natural gas futures

On September 6, 2017, natural gas (UNG) (BOIL) October futures rose 0.9% and settled at $3 per MMBtu (million British thermal units). On August 30–September 6, 2017, natural gas October futures rose 2.1%.

In the seven calendar days to September 6, 2017, US crude oil (USO) (DBO) (USL) October futures rose 7%. The S&P 500 Index (SPY) rose 0.3%, while the Dow Jones Industrial Average Index (DIA) fell 0.4% during this period. These equity indexes have some exposure to the energy sector.

Inventory data boosted natural gas prices in the trailing week. However, the mild weather forecast after Hurricane Harvey could have impacted natural gas prices negatively on September 5, 2017. On the same day, natural gas prices fell 3.2%.

US crude oil production near record levels could be a threat to natural gas prices. We’ll discuss this in Part 2. We’ll also discuss natural gas inventory data and the futures spread in subsequent parts of this series.

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Moving averages

On September 6, 2017, natural gas (UNG) (BOIL) active futures were 1.9% and 2.2% above their 20 and 50-day moving averages. On the same day, natural gas futures were 0.9% and 3.4% below their 100 and 200-day moving averages. Natural gas has been struggling around its important 100-day moving average. How the struggle resolves could be an important indicator of upcoming prices. The 50-day moving average was 5.5% below the 200-day moving average, which could mean that natural gas prices haven’t turned upward yet.

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