Natural Gas Fundamental Forecast – April 4, 2016

Natural Gas continued its downturn after climbing above $2 this week it has found it difficult to remain above the level as traders’ book profits every time it breaks the resistance level. Gas is currently down 4 points at 1.955.

The EIA weekly update says Natural gas spot price movements were mixed this report week (Wednesday, March 23, to Wednesday, March 30). The Henry Hub spot price rose slightly during the report week from $1.80 per million British thermal units (MMBtu) to $1.84/MMBtu yesterday.

At the New York Mercantile Exchange (Nymex), the April 2016 contract expired on Tuesday at $1.903/MMBtu. The May contract moved into the front month position and rose over the report week from $1.868/MMBtu last Wednesday to $1.996/MMBtu yesterday.

Net withdrawals from working gas storage totaled 25 billion cubic feet (Bcf) for the week ending March 25. Working gas stocks total 2,468 Bcf—68.3% above the year-ago level and 51.9% above the five-year (2011-15) average.

For the week ending March 24, gas-directed rigs increased by 3 to 92, and oil-directed rigs fell by 15 to 372. The total rig count fell by 12, and now stands at 464.

Temperatures were higher-than-normal during the storage week. Temperatures in the Lower 48 states averaged 48°F during the report week, 3% higher than normal and 3% above last year at this time. These above-normal temperatures are a continuation of an ongoing pattern that has occurred since the beginning of the 2015-16 heating season on November 1, 2015. Temperatures have been above normal levels during 18 out of 21 weeks in the 2015-16 heating season so far. Cumulative heating degree-days during this period are 17% below normal.

Natural Gas Weekly Weather Outlook

March 31- April 6: High pressure will hold over the southern and eastern US through Friday with highs again reaching the 60s to 80s, warmest over Texas and the Southeast (locally 90s), while also now warm across major Northeast cities. However, a strong Spring storm will continue tracking across the east-central US with showers and thunderstorms along the cool front and snow into the colder air over the eastern Rockies and N. Plains. Late Friday and through early next week a Polar front will push into the far northern US to bring subfreezing temperatures over the Great Lakes and Northeast. Overall, nat gas demand will be LOW into Friday and then MODERATE-HIGH this weekend into early next week.

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)