Natural Gas Fundamental Forecast – July 21, 2016

September Natural Gas futures could be facing another round of selling pressure on renewed concerns over the growing supply and on worries the summer heat won’t last long enough to put a dent in the current supply. The market is trading at $2.659, down $0.30 or -1.12%.

Technical factors are also weighing on the market with natural gas in a position to trade through the last bottom before the major July top at $2.990. This support level is $2.662. This move could drive the market into $2.593 to $2.499.

Although the current weather forecast shows temperatures are expected to be warmer than previously protected in the central U.S. from July 20 to July 24, and extremely hot conditions are also forecast for the West from July 25 to July 29, traders apparently don’t believe the heat wave will last long enough to relieve the supply glut.

This week’s storage report due out on Thursday is expected to show a build in a range between 32 billion to 44 billion cubic feet for the week-ending July 15. A week ago, the report showed a build of 64 billion cubic feet. The year before the build was 59 billion. The five-year average is 61 billion cubic feet.

Prices could drop if the report misses the estimate to the downside. This would indicate that stockpiles may be on their way to testing a record before the winter.

July 19 – July 25: Hot high pressure continues dominating the central, southern, and eastern US with widespread 90s to 100s, including all of Texas. However, a cool front with showers and thunderstorms will sweep across the Mid-Atlantic and Northeast with modest cooling the next couple of days.

Hot high pressure will then strengthen Wednesday-Friday over much of the country, with hot and humid conditions covering large stretches east of the Rockies where highs will reach 90s and 100s, including over major cities such as Chicago later this week, then the Northeast Coast this weekend.

Over the West, weather systems will keep conditions slightly cool over the NW, but still hot over the SW. Overall, natural gas demand will be high to very 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.

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)