US natural gas inventories are 23.2% higher than their five-year average. High natural gas inventories could limit the upside potential for US natural gas prices.
US natural gas price forecast
Aegent Energy Advisors estimates that US natural gas prices may not exceed $3.20 per MMBtu in August 2016. They may also not exceed $3.20 per MMBtu from August to October 2016 despite the hot summer forecast. Prices are expected to trade below $3.61 per MMBtu from November to March 2016–2017.
The EIA (U.S. Energy Information Administration) forecasts that US natural gas prices will average $2.29 per MMBtu in 2016 and $3.05 per MMBtu in 2017. The World Bank forecasts that US natural gas prices will average $2.5 per MMBtu in 2016 and $3 per MMBtu in 2017.
The roller coaster ride in natural gas prices affects oil and gas exploration and production companies such as Newfield Exploration (NFX), Cimarex Energy (XEC), and Range Resources (RRC). They also affect ETFs such as the VelocityShares 3x Inverse Natural Gas ETN (DGAZ), the Direxion Daily Natural Gas Related Bull 3X Shares ETF (GASL), and the PowerShares DWA Energy Momentum ETF (PXI).
For related analysis, you can visit Market Realist’s Energy and Power page.
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