| Why Natural Gas Prices Have Rallied 35% Since December 21 | |
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Natural Gas Prices Entered Bull Market in 7 Days Natural gas priceaction
February natural gas futures contracts traded on the NYMEX (New York Mercantile Exchange) rose by 6.3% and settled at $2.37 per MMBtu (British thermal units in millions) on Tuesday, December 29, 2015. The consensus of cold weather estimates has been driving natural gas prices. ETFs like the United States Natural Gas Fund (UNG) followed the price path of US natural gas prices. UNG rose by 2.6% and closed at $8.64 in Tuesday’s trade.
Colder weather
January 2016 may be colder than the previously estimated warmer weather forecast. Europe and the United States may have a cold winter, which would continue to support the natural gas market. Cold winter weather is expected across the northern parts of the United States during early January 2016. About 50% of US households use natural gas for heating purposes. The cold weather forecast would drive demand for natural gas and support natural gas prices.
The EIA (U.S. Energy Information Administration) is scheduled to release its weekly natural gas report on December 31, 2015. Last week, the EIA reported that natural gas inventory fell by 32 Bcf (billion cubic feet) for the week ended December 18, 2015. A larger-than-expected fall in natural gas inventory is pushing natural gas prices higher. You can read more about inventory in the next part of this series. The recent increase in natural gas prices benefits US natural gas producers such as Devon Energy (DVN), Newfield Exploration (NFX), Cimarex Energy (XEC), Rex Energy (REXX), and Gulfport Energy (GPOR).
Volatility picture
US natural gas was the top performer in Tuesday’s trade. A cold winter forecast, falling inventory, and short covering have caused natural gas prices to rally 35% in the last seven days. A more than 30% rise in natural gas prices suggests that they are entering the bull market. Prices have rallied after testing decade lows. However, natural gas prices have fallen more than 15% in 2015 due to oversupply concerns. The uncertainty in the oil and gas market affects ETFs such as the Fidelity MSCI Energy ETF (FENY), the PowerShares DB Energy ETF (DBE), and the PowerShares DWA Energy Momentum ETF (PXI).
Continue to Next Part Browse this series on Market Realist:
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Cimarex Energy Co.
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CODE : XEC |
ISIN : US1717981013 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Cimarex Energy is a producing company based in United states of america. Cimarex Energy is listed in Germany and in United States of America. Its market capitalisation is US$ 8.3 billions as of today (€ 7.2 billions). Its stock quote reached its highest recent level on May 23, 2018 at US$ 99.89, and its lowest recent point on September 30, 2021 at US$ 87.20. Cimarex Energy has 95 438 121 shares outstanding. |