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S&P 500 and US Natural Gas Futures Next Week


Sep. 15 2019, Updated 7:38 p.m. ET

US natural gas futures 

NYMEX natural gas futures contracts for March delivery fell 0.27% to $2.58 per MMBtu (million British thermal units) on February 15, 2018—the lowest settlement since August 11, 2016.

The VelocityShares 3x Long Natural Gas (UGAZ) and the United States Natural Gas ETF (UNG) track natural gas futures. UGAZ fell 1.9% to 53.4 on February 15, 2018, while UNG fell 0.5% to 21.8 on the same day.

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Price performance  

US natural gas futures fell on February 15, 2018, due to mild weather forecasts and less heating demand. March US natural gas futures dropped 4.3% on February 8–15, 2018. Prices declined due to mild weather and weak demand.

The Direxion Daily Natural Gas Related Bull 3X Shares ETF (GASL) and the VelocityShares 3x Inverse Natural Gas ETN (DGAZ) increased 10.8% and 3.5%, respectively, on February 8–15, 2018.

US natural gas futures have dropped ~12% in the last 12 months due to mild weather, high natural gas production, and weak natural gas demand. The mild weather forecast for next week could also pressure natural gas prices. All of the above factors could extend natural gas prices’ bearish momentum next week.

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S&P 500 performance 

The S&P 500 (SPY) rose 1.2% to 2,731.2 on February 15, 2018. The index closed at a record level on January 26, 2018. The S&P 500 rose for the fifth straight day.

The S&P 500 rose 5.8% in the last five sessions. The IT, financials, industrials, materials, and consumer discretionary sectors rose more than 5% in the last five sessions. These sectors supported SPY the most during this period. These sectors could drive SPY in the coming weeks.

Reuters estimates 4Q17 earnings growth of 18.9% for S&P 500 companies. Strong earnings results have been driving SPY.

Series overview 

In this series, we’ll discuss US natural gas inventories, the natural gas rig count, supply and demand, and natural gas price forecasts.


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