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Will Natural Gas’s Trend Reverse?

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Jun. 21 2019, Updated 7:48 a.m. ET

Natural gas’s fall and energy stocks

On June 20, natural gas active futures fell 4.3% and settled at $2.166 per MMBtu (million British thermal units) due to bearish inventory data. The natural gas active futures are at a new three-year low. Cabot Oil and Gas (COG), Antero Resources (AR), and Gulfport Energy (GPOR) fell 2%, 2%, and 1.2%, respectively. They were the weakest natural gas–weighted stocks. They ignored a rise of 5.7% in US crude oil prices.

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Natural gas on June 21

As of 4:30 AM ET on June 21, natural gas active futures have risen ~0.8%. On June 20, the U.S. Energy Information Administration reported that natural gas inventories rose by 115 Bcf (billion cubic feet)—8 Bcf more than Reuters analysts’ expectation. The rise could drag natural gas prices.

Production and demand data

Due to higher temperatures, Refinitiv expects the demand in the lower 48 US states to rise by 3.8 Bcf per day next week from this week’s expected demand of 81.2 Bcf per day. Refinitiv expects US natural gas supplies to rise to 96.7 Bcf per day from 95.8 Bcf per day this week. Since the demand outpaces the production growth, natural gas prices could rise next week.

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