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Natural Gas Inventories Rise, Warm Weather Ahead Natural gas price movement
On October 28, 2015, natural gas futures contracts for November delivery fell by 2.82% and closed at $2.033 per MMBtu (million British thermal units). Prices resumed their downtrend due to weak demand and a consensus of rising natural gas inventory. ETFs like the United States Natural Gas ETF (UNG) also fell in the direction of natural gas prices in Wednesday’s trading. UNG fell 3.20% and closed at $9.67 on October 28.
Inventory
Today, the EIA (U.S. Energy Information Administration) publishes the weekly natural gas inventory report. Market surveys project that natural gas inventories rose 70 Bcf (billion cubic feet) for the week ending October 23, 2015. Last week, natural gas inventories rose by 81 Bcf for the week ending October 16. The rise in natural gas stocks should weigh on the natural gas market.
Record-low natural gas prices affect oil and gas producers like Devon Energy (DVN), Rex Energy (REXX), Antero Resources (AR), and Range Resources (RRC). These companies’ natural gas production mix is more than 60% of their production portfolio. ETFs like the First Trust Energy AlphaDEX (FXN) and the Guggenheim S&P Equal Weight Energy (RYE) are also affected by the roller coaster ride in the energy market.
Weather
Commodity Weather Group estimates that warm winter could occur across the eastern United States between November 2 and 6, 2015. The El Niño weather phenomenon is responsible for the warmer-than-normal winter expected this year in the United States. Cold winter is the key driver of natural gas demand. US households consume about 49% of natural gas for heating. A mild winter means weak demand for natural gas, and it should negatively influence the natural gas market.
This is the fifth down-day for natural gas prices in the last ten trading sessions. During the same period, prices fell by 4.13% more on the average down-days than on the average up-days. Natural gas futures were the worst performer in yesterday’s trading. Prices have fallen by 25% year-to-date due to the rising natural gas inventory.
In this series, we’ll look at natural gas prices and fundamentals. For an in-depth fundamental look at oil and gas as well as related companies, sectors, and drivers, please visit Market Realist’s Energy and Power page.
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Devon Energy Corporation
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CODE : DVN |
ISIN : US25179M1036 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Devon Energy est une société de production minière et de pétrole basée aux Etats-Unis D'Amerique. Devon Energy détient divers projets d'exploration au Canada. Son principal projet en exploration est JACKFISH OIL SANDS PROJECT au Canada. Devon Energy est cotée aux Etats-Unis D'Amerique. Sa capitalisation boursière aujourd'hui est 21,2 milliards US$ (19,1 milliards €). La valeur de son action a atteint son plus bas niveau récent le 18 août 1995 à 10,00 US$, et son plus haut niveau récent le 22 février 2008 à 99,19 US$. Devon Energy possède 525 000 000 actions en circulation. |