Crude Oil and Natural Gas Prices Are Range Bound
Natural gas prices rise
August natural gas futures contracts rose by 1.26% on Monday. Gas prices closed at $2.80 per MMBtu (British thermal units in millions) on June 29, 2015. The consensus of warmer weather supported natural gas prices in yesterday’s trade. ETFs like the United States Natural Gas Fund LP ETF (UNG) mirrored the price direction of natural gas prices in Monday’s trade. UNG rose by 1.05% and settled at $13.46 on June 26, 2015.
Gelber & Associates reported that the weather will be warmer over the next two weeks in some parts of the US. The warmer weather consensus boosted natural gas prices in yesterday’s trade. However, mild weather is estimated in most of the US over the next 15 days, according to most weather forecasting models. Mild weather will slow down the demand for natural gas. It could put pressure on natural gas prices.
On June 25, 2015, the EIA (U.S. Energy Information Administration) estimated that the gas stockpile rose by 75 Bcf (billion cubic feet) for the week ending June 19, 2015. The EIA will release the next natural gas report on Thursday, July 2, 2015. The speculation of rising stocks will put pressure on natural gas prices.
This is the fifth up day for natural gas prices over the last ten days. Prices fell by 0.70% more on the down days than on the average up days over the last ten days. Natural gas prices fared well across all of the other commodities in yesterday’s trade. Gas prices fell by 3.50% YTD (year-to-date)—led by the rising natural gas stockpile and mild weather forecast.
Higher natural gas prices benefit oil and gas producers like WPX Energy (WPX), Antero Resource (AR), and Cimarex Energy (XEC). They account for 3.47% of the Spider Oil and Gas ETF (XOP). These companies also have a natural gas production mix that’s more than 43% of their production portfolio.
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