Natural gas dragged energy stocks

On May 28, the natural gas July futures fell 1% and settled at $2.58 per MMBtu (million British thermal units)—3.6% above the lowest closing level for active natural gas futures since June 6, 2016. On May 28, Gulfport Energy (GPOR) and Antero Resources (AR) fell 4.8% and 4.7%, respectively. They were the underperformers among natural gas–weighted stocks. These stocks also ignored a 0.9% rise in US crude oil prices.

Natural Gas Prices: The Key Drivers

Natural gas prices

In the trailing week, natural gas prices have fallen 2.2%. Natural gas supplies fell by 0.4 Bcf (billion cubic feet) per day last week compared to the previous week. The mild weather might have dragged natural gas prices. In this injection season, the outage at Cheniere Energy’s Sabine Pass liquefied natural gas export terminal in Louisiana in April made natural gas weaker. Next month, with the rise in the summer temperatures, natural gas will be burned to supply power to air conditioners in the United States. Natural gas is moving closer to the psychologically important level of $3.

Key technicals

On May 28, the natural gas active futures were 0.7%, 2.2%, 6.6%, and 16.6% below their 20-day, 50-day, 100-day, and 200-day moving averages, respectively. Natural gas below these key moving averages indicates weakness in the prices. On May 30, the 20-day moving average at $2.60 will be an crucial level to watch for natural gas traders.

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