Natural Gas Fundamental Forecast – February 4, 2016

Analysis and Recommendations:

Natural Gas drifted most of the early session, posting a choppy, two-sided trade. At last reading, the March futures contract was trading 2.019, down 0.006, or -0.30%. The market did pick up a little support after crude oil prices rebounded from their lows on speculation that Russia was ready to come to the table with OPEC and other Non-OPEC countries to discuss production cuts.

On Tuesday, February 2, U.S. natural gas futures dipped below the psychological $2.00 level where it quickly attracted buyers. The catalyst behind the selling pressure was a forecast calling for warmer weather through the middle of February. This surprised traders because the original forecast had called for a cold front.

Despite the intraday technical bounce, prices are expected to remain under pressure because of the slowdown in demand. This week’s U.S. Energy Information Administration’s storage report due on Thursday, Feb 4 is expected to show a withdrawal of approximately 200 billion cubic feet of gas for the week-ending January 29. This will be less than the previous week’s drawdown of 211 billion cubic feet.

Natural Gas Weekly Weather Outlook

Feb 1-8th: A weather system is currently racing across the Great Lakes with light snowfall, while rain showers are expected out ahead of it over the east-central US. Although, the main story this week will be the winter storm that follows late Mon-Tue with heavy snowfall setting up over the south-central Plains and then across the Midwest. More importantly, cold air that follows on the backside of it will drop overnight lows into the single digits and teens across the northern US. The eastern US will be mild to open the week with 30s to near 50°F north to very comfortable 60s and 70s south. Colder air will finally reach the eastern US Wednesday night/Thursday with a stronger cold blast likely to follow next weekend. Overall, Nat gas demand will be MODERATE-LOW then increasing to MODERATE-HIGH late in the 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)