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Natural Gas Fundamental Forecast – July 28, 2016

By:
James Hyerczyk
Published: Jul 27, 2016, 12:57 UTC

Despite calls for hot temperatures next week in key demand areas, September Natural Gas futures closed $0.017 lower, down -0.64% at $2.660. The price

NATURAL GAS

Despite calls for hot temperatures next week in key demand areas, September Natural Gas futures closed $0.017 lower, down -0.64% at $2.660. The price action suggests that investors feel the hot month of July wasn’t enough to prevent stockpiles from reaching a record before winter.

This week’s storage report slated for release on July 27 is expected to show a build in a range between 19 billion to 31 billion cubic feet for the week-ending July 22. This compares with an increase of 34 billion cubic feet in the prior week, 49 billion a year earlier and a five-year average of 52 billion cubic feet.

Last week the U.S. Energy Information Administration reported that total U.S. natural gas storage stood at 3.277 trillion cubic feet. This was 14.4% higher than level at this time a year ago and 17.1% above the five-year average for this time of year.

The price action suggests that despite the return of hot weather next week, the temperatures will not be intense enough to boost demand from power plants. Therefore, bearish traders have concluded that stockpiles will test physical storage limits of 4.3 trillion cubic feet at the end of October.

Natural Gas Weather Map

July 27 – Aug 2: Hot high pressure continues to dominate much of the US with widespread 90s to 100s, including all of Texas.

Hot and humid conditions will again combine to increase the Heat Index to dangerous levels over 100°F over large portions of the southern and eastern US to drive the nation’s strongest demand. Although, there is expected to be minor cooling over the north-central US/Great Lakes today with a bit stronger cooling Thursday through this weekend.

It’s also become warm over the Northwest while hot over California and the interior West. The hot ridge will return to the northern and eastern US next week with temperatures from Chicago to NYC warming back into the 90s. Overall Natural Gas demand will be high the next 7-days, locally moderate Great Lakes.

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)

30-Minute Natural Gas

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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