Natural Gas Fundamental Forecast – June 15, 2016

Natural Gas is flat but holding near recent highs as summer temperatures crack up residential demand. NG is trading at 2.584 as traders eagerly await this week’s EIA report. Natural-gas futures and the shares of natural-gas producers have surged in recent weeks on expectations that the oversupply is due to shrink as production falls and weather-driven demand returns to normal. Futures have already rallied to an eight-month high, up 33% since late May.

Natural-gas output in the Northeast has climbed in recent years even as producers have slashed spending and removed drilling rigs. That’s because new pipelines allowed them to bring previously drilled wells online and transport more gas to buyers. But that backlog of drilled wells is shrinking, the report says, and will likely vanish by early next year.

Summer 2016 may be a warm one over much of the U.S. as a transition into La Niña conditions are expected, according to a June-August outlook released by The Weather Company’s Professional Division Friday.

Well-above average temperatures are expected this summer for the northern tier of states, from the Pacific Northwest into the northern Plains, Great Lakes and Northeast. Warmer than average temperatures will also extend from southern California into the central and southern Plains and Southeast. The only area where cooler than average temperatures are currently expected this summer is for portions of central and south Texas.

June 10-16th: 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
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Weekly Natural Gas Storage Report
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