US Natural Gas Futures Could End This Week on a Bullish Note

Moving averages  

US natural gas (UNG) futures contracts for February delivery were above their 20-day, 50-day, and 100-day moving averages on January 19, 2018. Moving averages suggest that prices could trend higher. Prices increased 18% in the past month. The bullish momentum could support natural gas (DGAZ) prices this week. 

Higher gas (DGAZ) prices have a positive impact on energy companies’ (VDE) (XOP) profitability like Range Resources (RRC), EXCO Resources (XCO), and Cabot Oil & Gas (COG).

US Natural Gas Futures Could End This Week on a Bullish Note

Natural gas futures contracts  

The difference in February 2018 natural gas futures over February 2019 natural gas futures contracts was at $0.15 per MMBtu (million British thermal units) on January 17, 2018. It was near a four-month high. It suggests that natural gas demand could rise, which could push natural gas prices higher.

What could drive natural gas futures? 

A cold winter forecast and a larger-than-expected withdrawal in US natural gas inventories compared to the historical averages could support natural gas prices this week. However, an increase in natural gas production could weigh on prices (DGAZ).

EIA’s forecast 

US natural gas prices averaged $2.51 per MMBtu and $2.99 in 2016 and 2017, respectively. The EIA estimates that natural gas prices could average $2.88 per MMBtu in 2018. Record natural gas supplies could weigh on natural gas prices in 2018.

The EIA expects US natural gas prices to average $2.92 per MMBtu in 2019. The expectation of a rise in US natural gas demand and exports will support natural gas prices in 2019.

Read What Could Reverse the Trend in Crude Oil Prices in 2018? for the latest updates on crude oil.