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Will US Natural Gas Prices Take a Tumble in 2018?

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US natural gas futures’ moving averages  

November US natural gas (UNG)(GASL) futures were above their 20-day moving averages of $2.99 per MMBtu on October 13. However, they’re below their 50-day and 100-day moving averages of $3.02 per MMBtu and $3.06 per MMBtu on October 13, which suggests natural gas prices could be range-bound.

Moves in natural gas (FCG)(BOIL) prices impact natural gas exploration and production companies (IEO)(OIH) like Gulfport Energy (GPOR), WPX Energy (WPX), and EQT (EQT).

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EIA’s: US natural gas price forecasts  

The US Energy Information Administration (or EIA) released its STEO (“Short-Term Energy Outlook”) report on October 11. According to the EIA, US natural gas prices could average $3.03 per MMBtu in 2017—0.8% lower than the estimates from the previous STEO report. The EIA also estimates that prices could average $3.19 per MMBtu in 2018—3% lower than the estimates from the September STEO report. Prices averaged $2.63 per MMBtu in 2015 and $2.51 per MMBtu in 2016. 

Impact 

Natural gas is often an associated product of crude oil. Record US crude oil production and a rise in US natural gas production in 2018 could lead to excess supplies of natural gas. High natural gas supplies could pressure natural gas (UNG) prices.

For the latest updates on crude oil, see What Dennis Gartman Thinks about Crude Oil Prices.

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