Will US Natural Gas Futures Fall More?

US natural gas (GASL) futures contracts for January delivery were below their 20-day, 50-day, and 100-day moving averages on December 14, 2017.

Gordon Kristopher - Author

Nov. 20 2020, Updated 11:51 a.m. ET


Moving averages 

US natural gas (GASL) futures contracts for January delivery were below their 20-day, 50-day, and 100-day moving averages on December 14, 2017. The moving averages suggest that prices could trend lower.

US natural gas prices are near a ten-month low due to oversupply and forecasts of a warm winter. Lower gas (UGAZ) prices have a negative impact on energy producers’ (IEZ) (VDE) profitability like Exco Resources (XCO), Range Resources (RRC), and EQT (EQT).

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Natural gas futures contracts 

The premium for January 2019 US natural gas futures over January 2018 US natural gas futures was at $0.33 per MMBtu (million British thermal units) on December 14, 2017. The premium between these contracts was at $0.34 per MMBtu on December 7, 2017, which was the highest level since July 2010. A higher premium indicates that prices could fall.

Natural gas price drivers

A less-than-expected withdrawal in US natural gas inventories compared to the historical and seasonal average could weigh on natural gas prices next week. Forecasts of a warm winter could also weigh on natural gas (DGAZ) prices. However, any fall in US natural gas production, short covering, and a cold winter forecast could benefit gas prices.

EIA’s forecast

The EIA released its monthly STEO (Short-Term Energy Outlook) report on December 12, 2017. It estimates that US natural gas prices could average $3.12 per MMBtu in 2018, which is 0.7% higher than the STEO report in November. World Bank expects that US natural gas prices will average $3.1 per MMBtu in 2018.

Read Gasoline Inventories and Crude Oil Production Impact Oil Prices for the latest updates on crude oil.


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