The CFTC (U.S. Commodity Futures Trading Commission) will publish its weekly “Commitment of Traders” report on December 1, 2017. In its previous report, hedge funds’ net bullish positions in US natural gas futures (UGAZ) (BOIL) and options contracts fell by 5,872 contracts to 72,849 on November 14–21, 2017. However, net bullish positions rose by 47,741 contracts or 173% year-over-year. They’re also near a two-month high. It indicates that hedge funds are bullish on US natural gas (GASL) (FCG) prices.
US natural gas futures (DGAZ) (UNG) for January delivery were below their 20-day and 50-day moving averages of $3.15 per MMBtu (million British thermal units) and $3.19 per MMBtu on November 30, 2017. Prices were also below their 100-day moving average of $3.24 per MMBtu. It suggests that prices could trend lower next week. Lower gas prices have a negative impact on gas producers’ (XLE) (XOP) earnings like Range Resources (RRC), Rice Energy (RICE), WPX Energy (WPX), and Antero Resources (AR).
Natural gas price drivers
A massive fall in natural gas inventories compared to the historical and seasonal average could drive natural gas prices higher next week. Cold weather forecasts could also benefit natural gas (UNG) prices. However, any rise in US natural gas supplies and a warmer winter could pressure gas prices.
Aegent Energy Advisors estimates that NYMEX natural gas prices might not exceed $3.18 per MMBtu by the end of December 2017. US natural gas prices could average $3.10 per MMBtu in 2018, according to the EIA. Prices could average $3.1 per MMBtu in 2018, according to World Bank.
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