Crude Oil and Natural Gas Prices: Impacted by Supply Concerns
Natural gas prices rally
NYMEX-traded natural gas futures for July delivery rose by 5.05% and settled at $2.88 per MMBtu (British thermal units in millions) on June 15, 2015. Prices roses due to the speculation of supply disruption and rising demand. Gas tracking ETFs like the United States Natural Gas Fund LP ETF (UNG) also leveraged the performance of natural gas prices in yesterday’s trade. UNG rose by 4.86% and closed at $14.03 at the close of trade on June 15, 2015.
Commodity Weather Group reported that the eastern parts of the US will experience hot weather in June 2015. Weather will also be hot in the mid-Atlantic and Southeast regions of the US over the next five days. New York and Washington will also experience warm weather this week, according to AccuWeather. Warmer weather will boost the demand for natural gas. This will support gas prices. The consensus of supply disruption due to a storm brewing in the Gulf of Mexico also supported natural gas prices.
Gas prices rose for the fifth time in the last ten trading sessions. Prices increased by 1.83% more on the up days than on the average down days, over the last ten days. July gas futures ruled the chart with respect to other commodities in yesterday’s trade. Gas prices rose by 1.04% YTD (year-to-date)—led by the hot weather forecast.
The exponential increase in natural gas prices positively impacts energy producers like Memorial Resources (MRD), WPX Energy (WPX), and Devon Energy (DVN). These stocks account for 3.36% of the Spider Oil and Gas ETF (XOP). They also have a natural gas production mix that’s more than 43% of their total production portfolio.
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