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EIA Downgraded Natural Gas Prices for 2018

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Moving averages 

April US natural gas futures contracts were above their 20-day and 50-day moving averages on March 8, 2018. However, they were below their 100-day moving averages. 

US natural gas futures increased 2.1% on March 1–8, 2018. The United States Natural Gas ETF (UNG) rose 2.1% to 22.9 on March 1–8, 2018. UNG follows natural gas futures. The VelocityShares 3x Long Natural Gas (UGAZ) rose 6.2% to 61.1 on March 1–8, 2018. UGAZ tracks the performance of the S&P GSCI Natural Gas ER Index.

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Key natural gas price drivers for next week  

Cold weather is expected for the next 15 days, which could drive the heating demand and support natural gas prices. A larger-than-expected withdrawal in natural gas inventories compared to the historical averages could support natural gas prices. The expectation of higher exports could also benefit natural gas prices. However, an increase in US natural gas production and mild weather forecasts could weigh on natural gas prices.

Forecast  

US natural gas prices averaged $2.99 per MMBtu (million British thermal units) in 2017. On March 6, 2018, the EIA said that US natural gas prices could average $2.99 per MMBtu in 2018—6.6% lower than the February 2018 estimates. The EIA downgraded natural gas prices for 2018 due to the expectations of record natural gas production.

US natural gas prices could average $3.07 per MMBtu in 2019, according to the EIA. The expectation of higher natural gas demand and exports could benefit natural gas prices in 2019.

For the latest updates on crude oil, read Record Crude Oil Production and Inventories Pressure Oil Futures.

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