Natural gas

From January 4 to January 11, natural gas January futures rose 1.8% and settled at $3.099 per MMBtu (million British thermal units) on January 11.

Inventories are 15.1% below their five-year average, which may be limiting the upside in natural gas prices. In 2019 so far, natural gas prices have risen 3.7%.

Will Natural Gas’s Spike Sustain?

Weather forecast and natural gas’s spike

At 8:16 AM CST, natural gas spiked 8.3% from its last closing level. Recent weather forecasts indicate severe cold weather beginning on January 19 and continuing until the end of the month, which could help natural gas keep its bullish momentum—at least in the short term.

This week, natural gas’s 20-day and 100-day moving averages of $3.41 and $3.43, respectively, could signal an important resistance zone for natural gas prices. In fact, today as of 8:16 AM CST, natural gas prices had failed to sustain levels above these moving averages.

Refinitiv analysts increased the total degree days to 494 on January 11 from 477 on January 10 in the lower 48 US states for the next two weeks. The total degree days are higher than the 30-year average of 462 for these weeks.

Energy stocks

The rise in natural gas prices could be positive for natural gas–weighted stocks. Range Resources (RRC), Southwestern Energy (SWN), Gulfport Energy (GPOR), and Chesapeake Energy (CHK), the strongest natural gas–weighted stocks, rose 7.6%, 11.5%, 11.6%, and 20.9%, respectively, from January 4 to January 11.

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