Natural Gas Fundamental Forecast – June 7, 2016

Natural Gas added 43 points to 2.441 as summer temperatures increased demands and rising oil prices support the entire energy sector. Updated forecasts earlier in the week showed that hot weather could hit the southern US states and Texas through mid-June, boosting demand for electricity to power air conditioners. After a weak demand period over the winter, a hot summer is the best near-term hope for a recovery of natural gas prices and with many traders chomping at the bit, wanting to buy into the commodity when its low, we could see a volatile summer for natural gas futures. Still, there are concerns that this rally could be too much, too soon. With the natural-gas market remaining oversupplied, with inventories 35% above five-year average levels for this time of year, increased demand is necessary to correct the market. As quickly as prices have rallied on forecasts for warmer weather, they can collapse if the forecasts change.

The other major factor for prices this summer will be inventory injections. No matter what the oversupply situation, producers have to inject some natural gas into storage to prepare for the typical peak demand winter season. It is a challenge for producers to inject enough natural gas to prepare for next winter, while at the same time balancing injections with the fact that the market is so oversupplied. (Economics Calendar.com)

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

June 3-9th: A strong Spring weather systems will track across the Great Lakes and northeastern US the next few days with showers, thunderstorms, and slightly cooler temperatures. A second weather system will set up and stall over Texas and the South with heavy rains and abundant cloud cover. This will likely bring additional flooding to portions of Texas, but also with slightly cooler than normal temperatures as highs reach the 70s and 80s. It remains hot over the Southeast with 90s, while 90s to 100s over the West, including CA. A tropical low over the southern Gulf of Mexico will need close watching late this weekend for potential strengthening. Most importantly, hotter temperatures will gain ground over Texas, the Plains, and the South next week. Overall, nat gas demand will be LOW, but increasing next week to 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.

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)