Natural gas prices
As of November 10, 2017, the December US natural gas futures contract price closed at $3.21 per MMBtu (million British thermal unit). The Henry Hub natural gas spot price settled at $3.14 per MMBtu on November 10, which was higher than $3.01 per MMBtu on November 6, 2017.
According to the EIA’s Short-Term Energy Outlook report published on November 7, 2017, the average Henry Hub natural gas spot price could be $3.10 per MMBtu in 2018. It’s higher than the average $3.01 per MMBtu in 2017. The expected increase in natural gas consumption and exports in 2018 led the way for the $3.10 per MMBtu forecast.
According to weather forecasts, cool weather is expected in the weeks to come. The drop in temperatures could result in a stronger demand for natural gas, which could lead to a price increase. Natural gas producers Antero Resources (AR) and Cabot Oil & Gas (COG) benefit from strong natural gas prices, which could increase their margins.
Effect on coal producers
High natural gas prices could urge utilities to opt for coal instead of natural gas. That could ultimately help coal (KOL) producers gain more market share. Likewise, their market shares could fall if natural gas prices fall.
Next, let’s review crude oil prices during the week ended November 10, 2017.