U.S. Natural Gas Prices Drop Amid Rising Inventories and Cooler Temps
U.S. natural gas futures dropped significantly due to unexpected inventory data, highlighting market sensitivity to supply reports.
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Inventory Data
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Natural Gas Prices Rise on Anticipation of Storage Report and Hot Weather.
Natural gas futures rose ahead of the latest government inventory data, with the July Nymex gas futures contract up 6.3 cents at $2.405/MMBtu. National Weather Service data showed robust heat in Texas and neighboring states in the South, with outlooks pointing to these conditions expanding to northern markets as June wears on. Traders anticipate widespread summer conditions could permeate the Lower 48 next week or wait until late June, but either way, air conditioners will be cranking in full force.
Global Economic Concerns Cause Oil Prices to Plummet.
Despite falling crude oil inventories and rising implied gasoline demand, oil prices have been plunging due to concerns about weakening economic growth and a hawkish Federal Reserve. However, Goldman Sachs predicts that Brent and WTI crude oil will climb 23% and trade near $100 and $95 per barrel over the next 12 trading months, making energy and mining stocks good investments. The energy sector is currently the cheapest of all 11 U.S. market sectors, with a current PE ratio of 6.7. Moody's research report predicts that industry earnings will stabilize overall in 2023, and the current oil surplus is likely to morph into a deficit as the quarters roll on.