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Will the Weather Pressure US Natural Gas Futures?

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Updated

Natural gas futures  

October US natural gas (UNG) (GASL) futures contracts rose 0.4% to $2.96 per MMBtu (million British thermal units) in electronic trading at 2:05 AM EST on September 22, 2017.

In contrast, the E-Mini S&P 500 (SPY) December futures contracts fell 0.24% to 2,495 in electronic trading at 2:05 AM EST on September 22, 2017.

US natural gas prices have risen ~5.4% since August 4, 2017. However, they have fallen 17.11% year-to-date. Volatility in natural gas prices impacts energy ETFs (RYE) (XLE) (VDE) and natural gas producers’ earnings like Rice Energy (RICE), EQT (EQT), WPX Energy (WPX), and Rex Energy (REXX).

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Weather forecasts  

The western parts of the US might experience cooler-than-average temperatures next week. These regions might get rain and snow.

It could rain in the northeastern parts of the US. The southern and east-central parts of the US could have mild weather. Overall, the weather is expected to be cooler than average for the next few weeks.

More than 50% of US households use natural gas for heating and cooling purposes. Cooler-than-average temperatures could lead to a rise in natural gas demand. A rise in demand could support US natural gas (DGAZ) (UGAZ) (BOIL) prices.

Higher natural gas prices have a positive impact on natural gas producers’ (XOP) (XES) earnings like WPX Energy (WPX) and Rex Energy (REXX).

Changes in the weather and demand impact US natural gas inventories.

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