Natural Gas Fundamental Forecast – April 19, 2016

Natural Gas added 13 points to trade at 1.9150 recovering some of last week’s losses as prices remain very weak as spring weather keeps temperatures reigned in. Natural gas truck sales in the US and Canada improved in February after getting off to a slow start in 2016, according to ACT Research.

ACT said the increase is because of a high number of natural gas vehicle repeat sales, despite the continuing low cost of diesel prices, which is making the return on investment for adopting of natural gas less lucrative for fleets not yet invested in NG-fueled vehicles.

Natural gas production in the United States grew 5% last year. The growth brought total production to a record high of 79 Bcf/d for 2015, even as the rig count plummeted and natural gas prices remained depressed. Pennsylvania, Ohio, West Virginia, Oklahoma and North Dakota made up the increased production, offsetting lower levels of natural gas production in the rest of the United States.

US natural gas production hit a new record high in 2015 at nearly 80 billion cubic feet per day, including natural gas liquids – up five percent from 2014 – on the back of strong increases in shale gas output in eastern states and in North Dakota, said the U.S. Energy Information Agency in a report Friday.

These regional contributions offset long-term declines in the Gulf of Mexico and Louisiana; but the EIA says that next year’s gains will not be as remarkable, with low prices and falling rig activity cutting into new production and resulting in a projected one percent increase in 2017 and a two percent increase in 2018.

Natural Gas Weekly Weather Outlook

April 15 – April 21: A stalled weak front over the southern US will trigger additional rounds of showers and thunderstorms today, while a strong spring storm tracks into the Rockies with heavy snow. Out ahead of the storm, warm conditions will last for one more day over the Plains with highs of 70s and 80s before heavy showers and severe thunderstorms increase with cooling. The eastern and northern US will warm nicely over the weekend with highs of 50s to 70s gaining ground. By this weekend, very comfortable temperatures will have set up across a majority of the US besides the slightly cooler Rockies and N. Plains, while lasting all of next week besides weak shots of cooler air over the far NW and NE. Overall, nat gas demand will be LOW.

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.

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