Natural Gas Outlook for Nitrogen Fertilizers



Natural gas prices

Natural gas prices, which are key to US nitrogen fertilizer producers (MOO), were broadly lower during the week of April 4 to April 11, 2018, as reported by the EIA (U.S. Energy Information Administration).

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Weekly movement

Natural gas prices at Henry Hub, where natural gas is heavily traded in the United States, fell as much as 3% week-over-week to $2.69 per MMBtu (million British thermal units) on April 11 from $2.77 per MMBtu on April 4.

In the chart above, we see that in recent weeks, natural gas prices have remained lower compared to the previous year’s levels and have remained positive for CF Industries (CF), Nutrien (NTR) (AGU), and CVR Partners (UAN).

Natural gas price outlook

Last week, the EIA issued its latest Short-Term Energy Outlook Report on April 10, outlining the price outlook for natural gas in the rest of 2018 and 2019. The EIA expects the natural gas price to average $2.99 per MMBtu in 2018 and $3.07 per MMBtu in 2019.

By comparing the 2018 price outlook with the current level, we can see that natural gas prices appear to be heading north for the remainder of the year according to the estimates. In the next year, natural gas prices at Henry Hub are expected to rise even further from their current levels.

Next, we’ll discuss last week’s price movements for phosphate fertilizers.


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