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Why Natural Gas Prices Might Be Dull Initially This Week

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Natural gas’s rise and energy stocks

On June 7, natural gas July futures rose 0.6% from the lowest closing level in three years to $2.34 per MMBtu (million British thermal units). Inventory data and weaker demand could be behind the weakness in natural gas prices.

On the same day, Cabot Oil & Gas (COG) was unchanged, while Southwestern Energy (SWN) rose 0.6%, respectively. They were outperformers among natural gas–weighted stocks. Weaker oil prices might have kept a lid on Cabot Oil & Gas, Southwestern Energy, and other natural gas–weighted stock prices.

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Natural gas on June 10

At 7:27 AM EST on June 10, natural gas active futures were down 0.2%. On June 6, the U.S. Energy Information Administration reported a rise of 119 Bcf (billion cubic feet) in natural gas inventories—8 Bcf more than Reuters analysts’ expectations. The rise might weaken any recovery in natural gas prices.

Production and demand data

According to Refinitiv data, the demand in the lower 48 US states for this next week could fall by 0.4 Bcf per day from the demand of 80.6 Bcf last week due to moderate temperatures. This week, natural gas supplies in the US are expected to fall to 96 Bcf per day from 96.3 Bcf per day last week. The fall in the US oil rig count might be behind the decline in natural gas supply. Last week, the US oil rig count was at the lowest level since February 2, 2018.

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