Natural Gas Fundamental Forecast – February 8, 2016

Analysis and Recommendations:

Natural Gas added 86 points after the weekly inventory showed a lower than expected level. NG is holding at 2.059. U.S. natural gas futures fell to their lowest level so far this year on Thursday on a smaller-than-expected storage draw and forecasts for warmer weather over the next two weeks.

The U.S. Energy Information Administration said utilities pulled 152 billion cubic feet of gas from storage last week. That was slightly less than analysts’ 158-bcf forecast in a Reuters poll and compares with draws of 112 bcf in the same week last year and a five-year average draw of 165 bcf.

The latest midday U.S. weather model called for warmer-than-normal weather over the next two weeks, a switch from a forecast earlier in the morning calling for seasonably cold weather during that time. That warm weather is expected to continue for the rest of the winter, with February forecast to be 7 percent warmer than normal and March to be 19 percent warmer than normal, according to Thomson Reuters Analytics.

Natural Gas Weekly Weather Outlook

Feb 3-9th: A winter storm is currently tracking across the Midwest with a swath of snow ending. Ahead of the cold front over the east-central US, severe thunderstorms are expected with isolated tornadoes. Behind the cold front, overnight temperatures will drop into the single digits and teens with subfreezing temperatures pushing deep into the South. The eastern US will gradually begin to cool as the cold front gradually pushes through while fizzling Thursday. Over the weekend, a polar front will graze upper New England with light snow, while a milder weather system brings rain, snow, or ice to TX and across the SE. Finally, a Polar Outbreak will arrive early next week with much colder temperatures. Overall, nat gas demand will be MODERATE-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)