Natural Gas Fundamental Forecast – August 25 2016

The “never say die” natural gas market is trading higher again on Wednesday, reaching its highest level since August 5. Since reaching its low for the month on August 12, the market has appreciated considerably, catching a late summer second wind due to the return of hot weather to key demand areas.

October Natural Gas futures are trading at $2.808, up $0.014 or +0.50%.

Prices rose to a two-week higher early in Wednesday’s session as traders responded to forecasts for hot weather and three tropical systems developing in the Atlantic Ocean. Above average temperatures in the next two weeks are expected to boost natural gas demand, as consumers use more gas-powered electricity to run air conditioners.

According to NatGasWeather.com, temperatures could near 100 degrees in the central and eastern U.S. in the next eight to 15 days.

We’re in a speculative market so expect to see volatility. The weather may be driving it higher, but it will top well when the forecast changes. This market more than any anticipates changes. Professional traders move in and out according to forecasts. That being said, look for higher prices as long as the weather forecast continues to look for hot temperatures. When the forecasts stop being bullish then look for hedging pressure to drive the market back down.

Be aggressive as long as the forecast is on your side, but be will to exit when the forecast changes, not when the actual weather changes.

Aug 24 – Aug 30: High pressure will strengthen into the East Coast through the end of the week with temperatures warming back into the upper 80s to lower 90. Although, it’s expected to remain unsettled over the west-central US into Texas through the weekend as weather systems bring showers, thunderstorms, and modest cooling.

With warm upper level high pressure strengthening east of the Rockies into next week, natural gas demand will increase from moderate early week levels back to high.

Finally, a tropical system tracking toward the Caribbean will approach the US late this weekend. Overall, natural gas demand will be moderate the next 2 days and then back to high.

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)