Will Natural Gas Prices Recover?



Natural gas futures

On December 26, 2017, natural gas (UNG) (FCG) February futures fell 0.2% from their previous closing prices and settled at $2.65 per MMBtu (million British thermal units). On the same day, natural gas prices were just 3.7% above their 2017 lowest closing price of $2.56 per MMBtu on February 21, 2017. On December 25, markets were closed because of the Christmas holiday.

In the next part, we’ll discuss how natural gas’s supply concerns could continue to hurt natural gas prices. Between December 19 and December 26, the S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA) were almost unchanged. A gain of 4.2% in US crude oil (USO) February futures could be more important for these equity indexes compared to a fall of 1.6% in natural gas futures over this time period.

Moving averages

On December 26, natural gas active futures were 6.4%, 9.8%, 10.1%, and 12.2% below their 20-day, 50-day, 100-day, and 200-day moving averages, respectively. Also, there was a gap of 2.7% between the 50-day moving average and the 200-day moving average. On the same day, the 50-day moving average was below the 200-day moving average, which increased doubts about a possible recovery in natural gas prices.

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