Natural Gas Fundamental Forecast – April 5, 2016

Natural Gas added 23 points to trade at 1.979 as traders looked toward the warming temperatures. Temperatures were higher than normal since the beginning of 2015-16 heating season; this trend can be observed in 16 out of 19 weeks. Heating degree days –– a measure of the intensity of demand for natural gas –– have been 15 per cent below normal for most of the heating season, further pressurizing prices.

Even during the winter season in the US natural gas inventory withdrawals have been significantly low. Since the start of this year, inventory withdrawal from storage was at 1,165 billion cubic feet, substantially below the historical average.

Gas prices had been rising earlier this month in anticipation of hotter weather on the way driving demand for gas-fired power. But both coal and gas stockpiles are still very high, an oversupply that keeps futures prices down in order to lure power generators into buying more gas, analysts said.

US natural gas prices tested the intraday high of $2.03 per MMBtu last week. This is the highest level since February 2016. Natural gas prices rallied almost 14% in March 2016. The uptick in natural gas prices led to profit-booking.

Natural Gas Weekly Weather Outlook

April 1- April 6: High pressure will hold over the eastern US for one more day with highs again reaching the 60s to 80s, warmest over the Southeast while also much warmer than normal across major Northeast cities. However, a strong Spring storm continues tracking across the east-central US with showers and thunderstorms along the cool front and into the warm sector, with some snow into the colder air over the upper Great Lakes. 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, although the rest of the US relatively comfortable. Much of the US will be mild during the middle of next week before a fast moving weather system and cool blast sweeps across the eastern US late in the week. 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)