Natural Gas Had a Bullish Run Last Week with Weather Support
(Continued from Prior Part)
Natural gas price
Natural gas prices consistently rose in the week ended June 12. But they did see some weakness towards the later part of the week. Prices closed at $2.825 per MMBtu (million British thermal units) on Thursday, June 11—9% higher than last Friday’s close of $2.59 per MMBtu.
Natural gas prices affect the profitability of natural gas producers like Chesapeake Energy (CHK), Devon Energy (DVN), Range Resources (RRC), and QEP Resources (QEP). These stocks are components of the iShares U.S. Energy ETF (IYE). They make up ~3% of this ETF.
Price movements last week
Natural gas prices on Monday, June 8, increased by 4% compared to the prior Friday’s price of $2.59/MMBtu. They settled at $2.705 pr MMBtu.
Warmer weather forecasts boosted prices and could boost heating demand. MDA Weather Services forecasted warmer temperatures in the Midwest and parts of the East Coast this week.
Hotter weather forecasts continued to push prices higher on Tuesday as well, as MDA Weather Services forecasted above-normal temperatures in the Southeast as well as the Mid-Atlantic and the Great Lakes through June 23. Prices rose 5% to settle at $2.846 on Tuesday.
Prices continued to rise on Wednesday as well, as they held on to hotter weather forecasts, rising ~1.6% to touch $2.891.
The three-day rally ended on Thursday as data from the EIA (Energy Information Administration) suggested that natural gas stocks rose largely in line with market expectations. Read Part 1 of this series to see last week’s inventory movements). Prices fell ~2.3% and closed at $2.825 per MMBtu.
Prices seemed to have continued the mild weakness the next day as well. Natural gas traded around $2.80 on Friday.
Continue to the next part of this series for an analysis of various natural gas–exposed securities last week.
Continue to Next Part
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