Natural Gas Fundamental Analysis – January 11, 2016 – Forecast

Analysis and Recommendations:

Natural Gas continued to gain today edging up to 2.401 supported by cold weather as well as a drop in weekly inventory and production levels. The commodity gained 19 points in today’s session.  Natural-gas gained after the U.S. Energy Information Administration reported that supplies of the commodity dropped by 113 billion cubic feet for the week ended Jan. 1. Analysts polled by Platt’s expected a decline of between 93 billion cubic feet and 97 billion cubic feet.

The data, however, included a reclassification, which resulted in a slight increase in working gas stocks, the EIA said. Total stocks now stand at 3.643 trillion cubic feet, up 535 billion cubic feet from a year ago and 464 billion cubic feet above the five-year average, the government said. February natural gas was at $1.818 per million British thermal units, up 2.8 cents, or 1.4%. Prices traded $2.319 before the supply data.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended January 1 fell by 113 billion cubic feet, more than expectations for a decline of 99 billion.

That compared with a drawdown of 58 billion cubic feet in the prior week, 116 billion cubic feet in the same week last year, while the five-year average change for the week is a drawdown of 129 billion cubic feet.

Total U.S. natural gas storage stood at 3.643 trillion cubic feet, 14.7% higher than levels at this time a year ago and 12.7% above the five-year average for this time of year.

Natural Gas Weekly Weather Outlook

Jan 6th -Jan 12th: The West will see additional weather systems arrive with periods of rain and snow this week, keeping temperatures near to slightly cooler than normal. The eastern US will warm above normal by Thursday, lasting into Saturday or Sunday as mild high pressure briefly returns. A strong Polar blast will arrive into the central US Saturday, then gradually spreading south and east through Monday to bring the strongest nat gas demand of the season as lows drop below zero to single digits north, to teens and 20s deep into the southern US next week. Overall heating demand will be MODERATE, increasing back to HIGH.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

WEEKLY

Natural Gas Weekly Update
Release Schedule: Thursday between 2:00 and 2:30 p.m. (Eastern Time)

Weekly Natural Gas Storage Report
Release Schedule: Thursday at 10:30 (Eastern Time) (schedule)