Natural Gas Fundamental Forecast – July 11, 2016

Natural Gas eased down 7 points even as the greenback fell. Traders booked profits after gas soared above 2.90 this week. Summer temperatures are not as high as expected weighing on prices but overall we are just seeing a rally that exhausted itself. Prices rose earlier in the session after weekly inventory data showed that supplies of the fuel grew less than expected last week.

But daily supply indicators have suggested that next week’s inventory injection will be larger, weighing on prices, said Kyle Cooper, analyst at IAF Advisors in Houston.

Natural-gas producers injected 39 billion cubic feet of gas into storage last week, less than the 44-bcf addition that analysts and traders surveyed by The Wall Street Journal had expected, and below the five-year average addition of 77 bcf for that week.

Cooler weather both earlier this week and forecast into next week east of the Mississippi has weighed heavily on natural gas prices. Tuesday’s price drop was the largest single-day decline in eight months. Warmer weather continues to be forecast for the West and Southwest, raising demand for natural gas across the country to moderate to high levels.

Stockpiles are about 20% above their levels of a year ago and more than 23% above the five-year average.

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

July 7 – July 13: Hot high pressure continues dominating the central and southern US with widespread 90s to 100s, including all of Texas. Hot conditions have also expanded over the East with temperatures warming into the 90s, including across major cities such as DC and NYC. A weather system over the north-central US will gradually track across the Great Lakes, Mid-Atlantic, and Northeast late Friday and Saturday for slight and brief cooling. Next week, hot high pressure is expected to build back across the Great Lakes and Northeast with temperatures again warming above normal. Over the West, systems off the Pacific will keep conditions cooler than normal over the NW and N. Rockies, but still hot across the SW. Overall, nat gas demand will be MODERATE to HIGH over the next 7 days.

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.

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Natural Gas Weekly Update
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Weekly Natural Gas Storage Report
Release Schedule: Thursday at 10:30 (Eastern Time) (schedule)