Yahoo Finance Natural Gas Prices Are Trading within a Narrow Channel
Natural Gas Market Is Impacted by Inventory and Rig Count Data
Rectangular trading range
Natural gas futures contracts for October delivery are trading within a narrow price channel. Prices have been fluctuating between $2.65 and $2.75 per MMBtu (British thermal units in millions) since last week of August 2015. The tug-of-war between the inventory and weather is influencing natural gas prices.
Support and resistance
The slowing natural gas inventory and warm weather could support natural gas prices. The nearest resistance for natural gas is seen at $3 per MMBtu. Prices tested this mark in April 2015. In contrast, mild weather and oversupply concerns could drag natural gas prices lower. The nearest support for natural gas is seen at $2.60 per MMBtu. Prices hit this mark in June 2015.
The natural gas price chart suggests that natural gas prices could trade between $2.60 and $3 per MMBtu in the short term. Bank of America Merrill Lynch (BAML) forecasts that US natural gas prices could average around $2.85 per MMBtu in 2015. Natural gas prices could hit $3.50 per MMBtu by the end of 2015 and $4 per MMBtu by the end of 2016, according to estimates from Capital Economics.
The roller coaster ride of natural gas prices affects oil and gas producers like EXCO Resources (XCO), Antero Resources (AR), and Range Resources (RRC). These companies account for 3.05% of the SPDR Oil and Gas ETF (XOP). Their natural gas production mix is greater than 49% of their total production.
Oil and gas ETFs like the VelocityShares 3X Long Natural Gas ETN (UGAZ) and the United States Natural Gas Fund LP (UNG) are affected by uncertainty in the natural gas market.
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