Yahoo Finance US Natural Gas Price Forecasts in 2016
Natural Gas Market: Key Factors that Drive Natural Gas Prices
Supply and demand balance
The EIA (U.S. Energy Information Administration) estimates that the US natural gas supply could exceed demand by 3.4 Bcf (billion cubic feet) per day in 2016. Then, it could further increase to 3.73 Bcf per day in 2017.
Total US natural gas inventories are 48% higher than their five-year average. The widening supply and demand gap and high inventory could limit the upside potential for natural gas prices.
EIA’s natural gas price forecast
The EIA forecasts that US natural gas prices could average $2.25 per MMBtu (British thermal units in millions) in 2016. Then, it could further increase to $3.11 per MMBtu in 2017. Moody’s Investor Service forecasts that gas prices could average $2.25 per MMBtu and $2.50 per MMBtu in 2016 and 2017. Raymond James, a financial services firm, forecasts that US natural gas prices could average around $2 per MMBtu in 2016.
The rise and fall in natural gas prices affect upstream players like Comstock Resources (CRK), EXCO Resources (XCO), Gulfport Energy (GPOR), and Memorial Resource Development (MRD). They also impact funds such as the VelocityShares 3x Long Natural Gas ETN (UGAZ), the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), and the PowerShares DWA Energy Momentum Portfolio ETF (PXI).
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