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Natural Gas Fundamental Forecast – April 29, 2016

By:
Barry Norman
Published: Apr 28, 2016, 08:43 UTC

Natural Gas dipped 17 points to trade at 2.136 as spring weather continued while traders are hoping for an early summer. Today’s big event will be the

Natural Gas Fundamental Forecast – April 29, 2016

Natural Gas dipped 17 points to trade at 2.136 as spring weather continued while traders are hoping for an early summer. Today’s big event will be the weekly EIA inventory even though we have moved passed inventory season. Natural gas exports have sparked some interest this week. According to the Economics Calendar Mexico suddenly became a perspective market for natural gas producing companies from the United States.

According to the US Energy Department’s data, in 2015, the US produced 74 bcf (billion cubic feet) a day, 2.9 bcf of which were delivered daily into Mexico. IHS Energy forecasts exports to rise to 4.4 bcf per day by 2020.

Until 2020, liquefied natural gas exports and domestic consumption will be the main factors of increasing demand for the North American gas. In this regard, Mexico demonstrates a stable increase in gas demand. The increased demand is based in part on the country’s step away from using diesel to produce electricity and switching to natural gas.

At the same time, Mexico’s own gas reserves are being depleted. At the end of 2015, Mexico’s proven gas reserves have shaken off 17%: from 15.2 bcf to 12.6 bcf.

The Los Ramones II pipeline with a carrying capacity of 1.4 bcf will be commissioned in the summer of 2016 and will connect the Eagle Ford shale deposit in Texas with Mexico City. Another large pipeline with the capacity of 2.6 bcf is planned to be constructed along the bottom of Mexico Bay from Texas’s coastline to the city of Veracruz.

Natural Gas Weekly Weather Outlook

April 27- May 3: Warm temperatures continue over the South and Southeast, including Texas with plenty of upper 60s to 80s, locally 90s. However, temperatures are cooler over the central and northern US where weather systems are tracking through with showers and thunderstorms, including another round of dangerous severe storms today coming out of the Plains. Precipitation will be widespread the rest of this week over the northern and eastern US, which will bring slightly cooler than normal conditions, while remaining slightly warmer than normal over the southern US. Overall, much of the country will experience LOW nat gas demand, but locally MODERATE.

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)

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