Natural Gas Fundamental Forecast – August 1, 2016

Natural Gas dipped 21 points to 2.852 as sells booked profits after Thursday’s rally on lower inventory reports. Hot summer temperatures are expected to continue over the Lower 48 states through the weekend, except in the Great Lakes area. Early next week, temperatures are expected to rise there as well. Overall demand for natural gas is expected to be high next week.

Stockpiles are about 15% above their levels of a year ago and about 19% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 3.294 trillion cubic feet, around 524 billion cubic feet above the five-year average of 2.770 trillion cubic feet and 436 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 2.858 trillion cubic feet for the same period a year ago.

A new development is that the U.S. gas industry is becoming increasingly connected with global markets. The first tanker of U.S. liquefied natural gas to leave the Gulf Coast destined for East Asia passed through the newly widened Panama Canal this week.

Natural Gas Weekly Weather Outlook (www.natgasweather.com)

July 28 – Aug 3: Hot high pressure continues dominating much of the US with widespread 90s to 100s, including all of Texas, although scattered showers and thunderstorms will ease high temperatures a few degrees compared to recent impressive heat. However, cooling over the north-central US/Great Lakes the next several days will ease overall nat gas demand to only slightly above normal levels. It’s also become quite warm over the Northwest while remaining hot over California and the interior West. Early next week, the hot ridge will return to the northern and eastern US with temperatures from Chicago through the Ohio Valley warming back into the 90s mid-week. Overall nat gas demand will be HIGH the next 7-days, locally MODERATE Great Lakes.

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