| Why Natural Gas Prices Have Rallied ahead of Expiration | |
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Natural Gas Prices Skyrocket 25% in 6 Days Natural gas price movement
January natural gas futures contracts rose by 9.8% and closed at $2.23 per MMBtu (British thermal units in millions) yesterday. The cold weather forecast boosted natural gas prices in yesterday’s trade. Natural gas–tracking ETFs like the United States Natural Gas Fund (UNG) moved in the direction of natural gas prices. This ETF rose by 9.5% and settled at $8.42 in yesterday’s trade.
Weather update
The latest weather forecasts from Weather BELL Analytics show that cold winter weather could hit the United States from Arizona to the Northeast for the next two weeks. In contrast, the weather is expected to be warmer in parts of the East Coast during the same period. Approximately, 50% of US households use natural gas for heating purposes. The cold weather would drive demand for natural gas and benefit natural gas prices.
Meanwhile, the EIA (U.S. Energy Information Administration) reported that the natural gas inventory fell by 32 Bcf (billion cubic feet) for the week ending December 18, 2015. The consensus of falling natural gas inventory would continue to benefit natural gas prices. You can read more about inventory in the next part of this series.
Volatility analysis
January natural gas futures contracts will expire today. Natural gas prices were boosted by short covering from bearish traders, and natural gas was the top performer across commodities in yesterday’s trade. US natural has risen more than 25% in the last six sessions due to cold winter weather, falling inventory, and improving demand. The rise in natural gas prices benefits natural gas producers such as Southwestern Energy Company (SWN), EOG Resources (EOG), Cimarex Energy (XEC), Rex Energy Corporation (REXX), and Gulfport Energy Corporation (GPOR). Despite the recent rise, US natural gas prices have fallen 22% so far in 2015 due to record supply concerns.
Volatility in the oil and gas market also affects ETFs such as the Fidelity MSCI Energy Index ETF (FENY), the PowerShares DB Energy Fund (DBE), and the PowerShares DWA Energy Momentum Portfolio (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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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Cimarex Energy est une société de production minière basée aux Etats-Unis D'Amerique. Cimarex Energy est cotée aux Etats-Unis D'Amerique et en Allemagne. Sa capitalisation boursière aujourd'hui est 8,3 milliards US$ (7,2 milliards €). La valeur de son action a atteint son plus haut niveau récent le 23 mai 2018 à 99,89 US$, et son plus bas niveau récent le 30 septembre 2021 à 87,20 US$. Cimarex Energy possède 95 438 121 actions en circulation. |