Natural gas prices
Natural gas prices for the week ending October 26 increased week-over-week at most of the locations in the US, according to the EIA (Energy Information Administration).
At Henry Hub, which is the most heavily traded location in the US, natural gas prices rose by almost 1.5% week-over-week from $3.31 per MMBtu (million British thermal units) to $3.36 per MMBtu. Overall, natural gas prices have consistently been over the $3 level, which may pressure companies (MOO) such as CF Industries (CF), Mosaic (MOS), CVR Partners (UAN), and Nutrien (NTR).
In its short-term energy outlook report published on October 10, the EIA forecasts that natural gas prices at Henry Hub will average around $299 per MMBtu in 2018. While the last week’s natural gas prices were above this forecast level, we must note that for the most part of 2018, the spot prices for Henry Hub have stayed below the $3 mark. The EIA’s forecast for an average natural gas spot price at $3.12 per MMbtu in 2019 means the EIA expects natural gas prices to rise in the coming year. In this case, nitrogen-based fertilizer companies may raise prices, which may pressure fertilizer buyers.
Next, we’ll discuss phosphate fertilizer prices.