Natural Gas Fundamental Forecast – May 18, 2016

Natural Gas gained 11 points to bounce off its lows and summer temperatures seem to remain near the low end of the cycle. Gas demand is lower than expected at the moment. EC reported that natural gas will see a tough spring and summer as inventories remain 44% above the five-year average for this time of year, while at the same time natural gas producers are wanting to put natural gas supplies into storage to prepare for next winter. Overall, the market remains oversupplied and there is the potential that if producers input a large amount of gas into storage that next winter could disappoint, again.

Natural gas producers typically inject natural gas in the low demand periods, and this stockpiled natural gas is used during the peak-demand, winter heating season. Some increase in demand can also be observed in the summer if the weather is hot. Last winter, natural gas futures slumped to a 17-year low as a mild winter coincided with healthy stockpiles from heavy additions in the prior low-demand season. If producers repeat heavy storage additions this season and if next winter is mild, we could see an even more depressed natural gas market.

Natural Gas Weekly Weather Outlook

May 16-22nd: Numerous weather systems will impact the US this week with heavy showers and thunderstorms. It will be cool over the Great Lakes and northeastern US the next few days in the wake of the weekend cool blast, but then moderating into the upper 60s and 70s by mid-week. It will remain warm over the southern US where mostly 70s and 80s are expected, but with limited coverage of 90s. For the West, it will remain warm and unsettled. Overall, an active Spring pattern will continue with mostly upper 60s to 80s, but still with heavy showers, particularly over TX and the southern US. Simply, the northern and eastern US will drive stronger than normal nat gas demand to open the week, but then with national demand easing later in the week as more comfortable temperatures shift northward. Overall, much of the country will experience LOW nat gas demand this week after being MODERATE the next 2 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)