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US Natural Gas Price Drivers on August 6–10

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Natural gas prices and stocks

US natural gas futures increased 1.3% to $2.81 per MMBtu (million British thermal units) on July 26–August 2. The United States Natural Gas ETF (UNG) rose 2.03% during the same period. UNG seeks to track active natural gas futures. The First Trust Natural Gas ETF (FCG) aims to track the performance of an index of companies mainly involved in natural gas exploration and production. FCG fell 1.9% on July 26–August 2. EQT (EQT), Cabot Oil & Gas (COG), and Gulfport Energy (GPOR) fell 8.9%, 6.6%, and 4.9%, respectively, during the same period.

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Natural gas price drivers  

In the United States, the weather is expected to be warmer than usual for the next two weeks. US natural gas demand and exports are expected to rise in the coming weeks. For more on US natural gas demand, read the previous part of this series. US natural gas inventories were at the lowest level since 2014 for this time of the year. All of these factors could help natural gas prices in upcoming sessions. However, record US natural gas output and mild weather could weigh on natural gas prices in upcoming sessions. 

Charts 

From a charting perspective, US natural gas futures contracts were trading below their 200-day and 50-day moving averages of $2.86 and $2.87 respectively, on August 2. These levels could keep natural gas prices from rising more.

However, US natural gas futures contracts were trading above their 100-day and 20-day moving averages of $2.80 and $2.78, respectively, on August 2. These levels could act as key support levels for natural gas prices.

Forecasts  

US natural gas prices averaged $2.99 per MMBtu in 2017. US natural gas prices could average $2.99 per MMBtu in 2018 and $3.04 per MMBtu in 2019, according to the EIA.

Read Fed and OPEC’s Crude Oil Supplies Impact Oil Prices for the latest updates on crude oil.

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