Natural gas futures 

December US natural gas (UNG) (FCG) futures contracts trading in NYMEX rose 1.7% to $2.98 per MMBtu (million British thermal units) on November 3, 2017. The prices rose 2.4% last week. The prices rose due to short-covering and hopes of higher heating demand for natural gas.

December US natural gas (DGAZ) (BOIL) futures are near a ten-day high. Higher natural gas prices benefit natural gas producers (RYE) (VDE) like Exco Resources (XCO), EOG Resources (EOG), Chevron (CVX), and Antero Resources (AR).

US Natural Gas Futures and Wall Street Rose Last Week

Highs and lows  

US natural gas active futures tested $3.99 per MMBtu on December 28, 2016—the highest level in almost three years. On the other hand, prices tested $1.68 per MMBtu on March 4, 2016—the lowest level in almost 18 years.

Key natural gas price drivers this week  

US natural gas production was near an 18-month high, which could weigh on natural gas prices. Any rise in natural gas inventories above the seasonal and historical average could also pressure natural gas prices. The US weather is expected to be mild this week, which could also weigh on US natural gas (GASL) (UGAZ) futures.

Wall Street  

The NASDAQ (QQQ) rose 0.7% to 6,764.44 on November 3, 2017. The Dow Jones Industrial Average Index (DIA) rose 0.1% to 23,539.19 on the same day. The S&P 500 (SPY) rose 0.31% to 2,587.84 on November 3, 2017. The strong 3Q17 earnings results, hopes of tax cuts, improving US economy, and job market are driving Wall Street.

The NASDAQ recorded its sixth consecutive weekly gains. Meanwhile, the Dow Jones Industrial Average Index and the S&P 500 posted their eighth consecutive weekly gains. So far, the IT (XLK) (VGT), healthcare (XLV), and materials (XLB) sectors have supported SPY in 2017.

What’s in this series?

In this series, we’ll focus on natural gas inventories, rig counts, natural gas production and consumption, and the World Bank’s price forecast for US natural gas.

In the next part, we’ll discuss how the weather could drive US natural gas prices.

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