13 Jun

Analyzing Natural Gas Prices

WRITTEN BY Rabindra Samanta

Natural gas prices

On June 12, natural gas July futures fell 0.3% and settled at $2.94 per MMBtu (million British thermal units). On the same day, Chesapeake Energy (CHK) and Southwestern Energy (SWN) fell 2.2% and 0.2%, respectively, while Cabot Oil & Gas (COG) rose 0.2%. These three stocks were the underperformers on our list of natural gas–weighted stocks.

Analyzing Natural Gas Prices

On June 12, ETFs that follow natural gas futures, the United States Natural Gas ETF (UNG) and the ProShares Ultra Bloomberg Natural Gas ETF (BOIL) fell 0.2% and 0.3%, respectively.

What’s driving natural gas prices?

On June 5–12, natural gas July futures rose 1.7%. During this period, inventory data boosted natural gas prices. However, concerns about rising natural gas production might have kept natural gas under the $3 level since January 31. In the next part, we’ll discuss a key driver for natural gas production.

The National Weather Service’s data suggest higher-than-average temperatures for most of the US in the next six to ten days. Warmer weather could support natural gas prices.

Moving averages

On June 12, natural gas active futures closed 1.6%, 5%, 4.8%, and 2.2% above their 20, 50, 100, and 200-day moving averages, respectively. Natural gas active futures trading above all of the moving averages is a bullish signal for prices.

However, the 200-day moving average at $2.87 is an important support for natural gas prices. If natural gas prices break below this level, a strong downside in natural gas prices might be possible.

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