Natural Gas Fundamental Forecast – April 8, 2016

Natural Gas continued its decline to trade at 1.899 down 12 points ahead of today’s weekly inventory report. Longer term weather shows that spring like conditions will extend through April reducing the hopes for an early summer. Gas use typically hits a seasonal low with spring’s mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning.

The heating season from November through March is the peak demand period for U.S. gas consumption. However, a warmer-than-normal winter due to the El Niño weather pattern has limited the amount of heating days and reduced demand for the fuel.

The weekly U.S. Energy Information Administration’s storage report scheduled for release on Thursday is expected to show a build of approximately 7 billion cubic feet for the week ending April 1.

That compares with a withdrawal of 25 billion cubic feet in the prior week and a five-year average decline of around 15 billion for this time of year.

Total U.S. natural gas storage stood at 2.468 trillion cubic feet as of last week, according to the U.S. Energy Information Administration, 40.6% higher than levels at this time a year ago and 34.2% above the five-year average for this time of year.

Some market experts worry that stockpiles at the end of March will hit at an all-time high of around 2.5 trillion cubic feet, topping the end-of-withdrawal-season high of 2.472 set at the end of March in 2012.

Natural Gas Weekly Weather Outlook

April 5 – April 11: A stalled front over the Great Lakes and NE will keep conditions cool another day before briefly warming mid-week before yet another Spring storm and associated cool blast follows late Thursday through Saturday to bring another quick shot of overnight lows dropping below freezing. However, over the rest of the country, mild high pressure is dominating, resulting in mostly pleasant afternoon temperatures of 50s to 80s, albeit a bit warm over Texas. After the late week weather system tracks across the eastern US, including relatively deep into the SE, another milder break will set up late this weekend before one last relatively cool weather system follows early next week. It remains warm over the West, although showers and some cooling is expected this coming weekend. Overall, nat gas demand will be mainly LOW over much of the country except MODERATE-HIGH over the Great Lakes and NE, and then briefly SE.

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)