Natural Gas Fundamental Forecast – April 1, 2016

Natural Gas gained 8 points to hold just at the $2 level ahead of today’s weekly inventory report. The price of commodities – from oil to natural gas, from minerals to agricultural raw materials – is an economic variable whose implications have always been fairly simple to understand. A price increase is generally a negative event for industrialized economies that are importing raw materials, such as Europe, Japan and the United States, while a falling price is a positive event. Times of low commodity prices have often coincided with phases of economic growth in industrialized countries. This was the case in the ‘60s and in the ‘90s.

The May contract, however, only inched up from where it was yesterday, and at times traded lower with a heavy oversupply continuing to weigh on the market. Natural-gas futures for May delivery settled up 1.5 cents, or 0.8%, at $1.996 a million British thermal units on the New York Mercantile Exchange.

Weather forecasts are showing a colder-than-normal start to April for parts of the Northeast and Midwest, which could bring a bit of late-season heating demand. Output is also weakening, down 2% from a recent high of 73 billion cubic feet a day, a sign that major changes may be on the way for supply, Energy Aspects said Wednesday

“Production numbers continue to look weak,” the consultancy said in a note.

Analysts and traders expect the government’s official storage update will show stockpiles shrunk by 24 billion cubic feet of gas during the week ended March 25. That would put stockpiles at 2.469 trillion cubic feet, just shy of the 2.472-bcf record set for the end of winter in 2012, a record many thought would be broken this spring.

Natural Gas Weekly Weather Outlook

March 29- April 4: High pressure will hold over the central and southern US the next few days as mild temperatures again reach the 60s to 80s, warmest over the Plains and Texas, while also gradually spreading across the Eastern US. A fresh weather system over the western US will bring rain and snow along with slightly cooler than normal temperatures. The western system will track into the central US mid-week, and then phase with a Polar front to bring subfreezing temperatures this weekend over the Great Lakes and NE. Early next week will start cool over the NE but quite mild over the rest of the country. Overall nat gas demand will be LOW to MODERATE the next several days then briefly HIGH Sat-Mon.

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)