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Natural Gas Fundamental Analysis – November 26, 2015 – Forecast

By:
Barry Norman

Analysis and Recommendations: Natural Gas  took another hit today declining 51 points to 2.273 ahead of the early weekly inventory report which is due

Natural Gas Fundamental Analysis – November 26, 2015 – Forecast

Natural Gas Fundamental Analysis – November 26, 2015 - Forecast
Natural Gas Fundamental Analysis – November 26, 2015 - Forecast
Analysis and Recommendations:

Natural Gas  took another hit today declining 51 points to 2.273 ahead of the early weekly inventory report which is due later in the session.  The shale gas boom led to a massive rise in natural gas production. In turn, this spurred a fall in natural gas prices. As a result, natural gas is a strong competitor against coal. Cleaner and more competitive natural gas ate away the market share for coal in electricity generation, which is a continuing trend.

Natural gas prices and coal’s market share in electricity generation are related. When natural gas prices fall, coal loses market share, as it becomes more economical to use natural gas for power generation. On the other hand, a rise in natural gas prices generally leads to a rise in coal’s market share.

The inventory figure was higher than the 3,596 Bcf recorded the year before and the five-year average of 3,793 Bcf. The change of 15 Bcf in the underground inventory during the week ended November 6 was lower than the 23 Bcf forecast by a group of analysts surveyed by Bloomberg.

Natural gas inventory has risen over the past 29 weeks since the injection season started. A lower-than-expected inventory indicates lower-than-expected supply or higher-than-expected demand. This generally boosts natural gas prices.

Natural Gas Weekly Weather Outlook

November 20-25th: A strong weather system and associated cold blast will track across the central and eastern US this weekend, with a swath of snowfall through the central Plains and lower Midwest. This will drop temperatures over the northern US into the teens and 20s, with 30s deep into Texas and the Southeast. Another reinforcing cold blast will follow Sunday Night into Monday before warm high pressure returns by the middle of the week. The Western US will be mostly mild and dry this weekend, apart from the Northwest where a Pacific system will push inland. This storm will strengthen early next week with increasing valley rains and mountain snows, including into California, with a more impressive cold blast to follow at the end of the week. Overall demand will increase to HIGH Saturday-Thursday then back to MODERATE.

FxEmpire provides in-depth analysis for each currency and commodity 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.

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)

 

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