Natural Gas Fundamental Forecast – June 13, 2016

Natural Gas eased 40 points to 2.577 remaining near the top of its 2016 trading range but giving up some momentum as traders booked profit after the weekly inventory printed higher than expected. The rally in the US dollar weighed on global commodities. The weather continues to support increased demand as summer temperatures remain steady. Natural gas is “still cheap enough at these levels to drive decent power sector natgas consumption,” said Richard Hastings, macro strategist at Seaport Global Securities. Supply increases “have been trending below some of the big historical comparisons, largely due to coal-to-gas switching.”

The U.S. Energy Information Administration early Thursday reported that domestic supplies of natural gas in storage rose 65 billion cubic feet for the week ended June 3. That was below the average rise of 80 billion cubic feet expected by analysts polled by S&P Global Platts.

The smaller weekly increase “suggests that U.S. gas production is falling as we start to face record demand,” said Phil Flynn, senior market analyst at Price Futures Group. He said demand is 8% higher than a year ago, even though summer cooling demand for the commodity hasn’t yet begun.

Total stocks stand at 2.972 trillion cubic feet, up 660 billion cubic feet from a year ago and 722 billion cubic feet above the five-year average, the EIA data showed.

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

June 9-15th: A cool blast remains draped across the Great Lakes and Northeast with temperatures 5-15°F cooler than normal as highs only reach the 60s and 70s. Also of importance, hot high pressure over the West is shifting east to cover Texas and the central and southern US with highs of upper 80s and 90s becoming widespread including as far north and east as Chicago by late in the week or this weekend. Overall, hotter temperatures will gain ground late this week with the exceptions being the NW and NE due to weather systems arriving with showers. Overall, nat gas demand will be MODERATE.

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
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)