Lower Natural Gas Liquids Production a Positive Sign for Nat-Gas Futures (UNG)

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Depressed U.S. natural-gas liquids prices could lead to a slowdown in drilling which will ultimately be supportive of natural gas futures, according to analysts at Bank of America.

The firm said in a recent report that "as liquids prices converge with Henry Hub natural gas prices, U.S. natural gas output will be negatively impacted."

This supports their long-term view that the price of natural gas futures will rise.

Natural gas is lower in early trading on Tuesday and appears to be in a consolidation phase after a healthy move north this month. Natural gas futures can be traded using the ETF United States Natural Gas (NYSE: UNG).

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