Natural Gas News: Will Strong Production Lead to Further Declines?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 23 2024
0mins
Source: NASDAQ.COM
- Drop in U.S. Natural Gas Prices:
- Last week, U.S. natural gas prices fell over 6% due to increased production and changing weather patterns.
- Natural gas futures settled at $2.705, marking a significant decrease.
- Prices declined for the fifth time in six sessions driven by high production levels from the Appalachian region.
- Despite extreme heat boosting spot prices, rising production levels offset the impact on the market.
- The potential cooling rains from a tropical storm added uncertainty and contributed to bearish sentiment among traders.
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Analyst Views on DIG
Wall Street analysts forecast DIG stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for DIG is USD with a low forecast of USD and a high forecast of USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
0 Analyst Rating
0 Buy
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0 Sell
Current: 48.590
Low
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Current: 48.590
Low
Averages
High
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About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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Oil Price Surge: Oil prices have surged significantly due to escalating tensions in the Middle East, with Brent crude rising over 8% and U.S. crude climbing 9.1%, leading to increased interest in leveraged energy ETFs as investors anticipate further price increases.
Potential Impact of Conflict: Iran's missile attacks on Israel have raised fears of retaliation, which could disrupt oil supplies and push prices towards $100 per barrel, prompting traders to adopt bullish positions in the oil market.
See More
Natural Gas News: Will Strong Production Lead to Further Declines?
- Drop in U.S. Natural Gas Prices:
- Last week, U.S. natural gas prices fell over 6% due to increased production and changing weather patterns.
- Natural gas futures settled at $2.705, marking a significant decrease.
- Prices declined for the fifth time in six sessions driven by high production levels from the Appalachian region.
- Despite extreme heat boosting spot prices, rising production levels offset the impact on the market.
- The potential cooling rains from a tropical storm added uncertainty and contributed to bearish sentiment among traders.
See More
Natural Gas Price Forecast: Shows Continued Strength Following Retracement
- Natural Gas Trading: Natural gas showed strength by trading near the highs of the previous day, with signs of closing above the downtrend line.
- Technical Analysis: The bounce from a recent low confirmed the 20-Day Moving Average as relevant for the current uptrend. A bullish reversal set the stage for further upward movement.
- Retracement Levels: After a significant advance, a retracement to around 50% occurred, indicating a healthy correction in the price movement.
- Weekly Outlook: A potential weekly bullish pattern may form if support at 2.76 holds and the week ends in the top third of the range, negating the previous bearish signal.
- Future Price Targets: A rally above 3.16 could continue the uptrend, with resistance expected around 3.20 before targeting the swing high of 3.39 from early January.
See More
Natural Gas News: Can Heatwave Overcome Rising Production?
- U.S. Natural Gas Futures: Experienced a volatile week, initially climbing above $3/MMBtu but ultimately succumbing to bearish pressure due to increased production and a less severe heatwave forecast.
- Market Trends: While futures prices declined, cash markets saw a surge as users scrambled for supply ahead of an expected late-June heat spike.
- Factors Contributing to Bearish Sentiment: Comfortable storage levels, robust production in the Lower 48 states, and the completion of the Mountain Valley Pipeline (MVP) contributed to bearish sentiment in futures.
- Potential Bullish Factors: Forecasts predict a heatwave driving up demand for natural gas-fired power generation, potentially supporting cash prices.
- Outlook: Short-term outlook for natural gas futures leans bearish due to ample storage and rising production, but traders should monitor storage reports, pipeline developments, and weather updates for potential shifts in market dynamics.
See More
Natural Gas Price Forecast: Healthy Pullback in Prep for Bull Continuation
- Natural Gas Price Movement: Natural gas prices are pulling back from recent highs, reaching a new low of 2.87 with potential for further decline before the week ends.
- Support Levels: Support is expected around the uptrend line at 2.84 to 2.82, but if it fails, the price could drop further.
- Trend Adjustment: A lower slope angle in the trend may be necessary as steep trends can lose momentum, while shallower trends tend to increase in angle over time.
- Weekly Outlook: The weekly chart shows a bearish shooting star pattern, similar to previous weeks that led to a brief drop before continuing the uptrend.
- Future Projection: Despite retracements, there is potential for natural gas to continue rising towards a target of 3.78, indicating more upside in the current trend.
See More
Natural Gas News: Will Heatwave Propel Prices Above $3.00?
- Natural Gas Futures Surge: Natural gas futures rose close to $3 due to hot weather forecasts for late June, despite a bearish government inventory report.
- Demand and Inventory: Cooling demand in the West is expected to ease, but national demand may rise in the third week of June. The latest EIA report showed an injection of 98 Bcf into storage, slightly below the five-year average.
- Production Trends: U.S. dry gas production has been declining since late 2023, with lower inflation-adjusted futures prices and fewer active rigs. Production is expected to remain flat without a price rebound.
- LNG Market: LNG feed gas volumes have decreased, impacted by maintenance at some terminals. Regional price movements varied, with California prices falling and West Texas prices rising.
- Market Outlook: Bullish outlook due to upcoming hot weather increasing demand. Production constraints and summer combustion demand are likely to tighten supplies, supporting higher prices.
See More
Oil Logs Big Weekly Gain in a Year: Leveraged Energy ETFs Surge
Oil Price Surge: Oil prices have surged significantly due to escalating tensions in the Middle East, with Brent crude rising over 8% and U.S. crude climbing 9.1%, leading to increased interest in leveraged energy ETFs as investors anticipate further price increases.
Potential Impact of Conflict: Iran's missile attacks on Israel have raised fears of retaliation, which could disrupt oil supplies and push prices towards $100 per barrel, prompting traders to adopt bullish positions in the oil market.
See More
Natural Gas News: Will Strong Production Lead to Further Declines?
- Drop in U.S. Natural Gas Prices:
- Last week, U.S. natural gas prices fell over 6% due to increased production and changing weather patterns.
- Natural gas futures settled at $2.705, marking a significant decrease.
- Prices declined for the fifth time in six sessions driven by high production levels from the Appalachian region.
- Despite extreme heat boosting spot prices, rising production levels offset the impact on the market.
- The potential cooling rains from a tropical storm added uncertainty and contributed to bearish sentiment among traders.
See More
Natural Gas Price Forecast: Shows Continued Strength Following Retracement
- Natural Gas Trading: Natural gas showed strength by trading near the highs of the previous day, with signs of closing above the downtrend line.
- Technical Analysis: The bounce from a recent low confirmed the 20-Day Moving Average as relevant for the current uptrend. A bullish reversal set the stage for further upward movement.
- Retracement Levels: After a significant advance, a retracement to around 50% occurred, indicating a healthy correction in the price movement.
- Weekly Outlook: A potential weekly bullish pattern may form if support at 2.76 holds and the week ends in the top third of the range, negating the previous bearish signal.
- Future Price Targets: A rally above 3.16 could continue the uptrend, with resistance expected around 3.20 before targeting the swing high of 3.39 from early January.
See More
Natural Gas News: Can Heatwave Overcome Rising Production?
- U.S. Natural Gas Futures: Experienced a volatile week, initially climbing above $3/MMBtu but ultimately succumbing to bearish pressure due to increased production and a less severe heatwave forecast.
- Market Trends: While futures prices declined, cash markets saw a surge as users scrambled for supply ahead of an expected late-June heat spike.
- Factors Contributing to Bearish Sentiment: Comfortable storage levels, robust production in the Lower 48 states, and the completion of the Mountain Valley Pipeline (MVP) contributed to bearish sentiment in futures.
- Potential Bullish Factors: Forecasts predict a heatwave driving up demand for natural gas-fired power generation, potentially supporting cash prices.
- Outlook: Short-term outlook for natural gas futures leans bearish due to ample storage and rising production, but traders should monitor storage reports, pipeline developments, and weather updates for potential shifts in market dynamics.
See More
Natural Gas Price Forecast: Healthy Pullback in Prep for Bull Continuation
- Natural Gas Price Movement: Natural gas prices are pulling back from recent highs, reaching a new low of 2.87 with potential for further decline before the week ends.
- Support Levels: Support is expected around the uptrend line at 2.84 to 2.82, but if it fails, the price could drop further.
- Trend Adjustment: A lower slope angle in the trend may be necessary as steep trends can lose momentum, while shallower trends tend to increase in angle over time.
- Weekly Outlook: The weekly chart shows a bearish shooting star pattern, similar to previous weeks that led to a brief drop before continuing the uptrend.
- Future Projection: Despite retracements, there is potential for natural gas to continue rising towards a target of 3.78, indicating more upside in the current trend.
See More
Natural Gas News: Will Heatwave Propel Prices Above $3.00?
- Natural Gas Futures Surge: Natural gas futures rose close to $3 due to hot weather forecasts for late June, despite a bearish government inventory report.
- Demand and Inventory: Cooling demand in the West is expected to ease, but national demand may rise in the third week of June. The latest EIA report showed an injection of 98 Bcf into storage, slightly below the five-year average.
- Production Trends: U.S. dry gas production has been declining since late 2023, with lower inflation-adjusted futures prices and fewer active rigs. Production is expected to remain flat without a price rebound.
- LNG Market: LNG feed gas volumes have decreased, impacted by maintenance at some terminals. Regional price movements varied, with California prices falling and West Texas prices rising.
- Market Outlook: Bullish outlook due to upcoming hot weather increasing demand. Production constraints and summer combustion demand are likely to tighten supplies, supporting higher prices.
See More
