Natural gas prices
In the week ending October 19, natural gas prices trended lower after experiencing a spike in the week ending October 12 at Henry Hub in the United States (MXI). According to the EIA (U.S. Energy Information Administration), most natural gas prices in locations other than Henry Hub rose.
Natural gas prices in Henry Hub declined to $3.31 per MMBtu (million British thermal units) from $3.37 per MMBtu in the week ending October 12. In places other than Henry Hub, natural gas spot prices rose due to “colder-than-normal temperatures,” according to the EIA.
Discussing natural gas price movements is important for investors in fertilizer companies like CF Industries (CF), Mosaic (MOS), Nutrien (NTR), and CVR Partners (UAN). The companies use natural gas as an input for producing nitrogen-based fertilizers.
Each month, the EIA issues its outlook on natural gas prices for the current year and next year. For 2018, the EIA expects that natural gas prices will average $2.99 per MMBtu. For 2019, the EIA estimates that natural gas prices will be slightly higher at $3.12 per MMBtu.
Next, we’ll discuss phosphate fertilizer prices.