Natural Gas Fundamental Forecast – May 24, 2016

Natural Gas soared 49 points to trade at 2.256 following a two day rally as temperatures soared unexpectedly increasing demand for air conditioning. The weather report turned hotter ahead of the Memorial Day weekend which is supporting the price of NG regardless of the climb in stocks reported last week.

The annual energy outlook for the United States looks bullish, with most sectors growing in the coming years and the nation well on its way to moving from being a net energy importer to a net exporter. By 2040, EIA estimates natural gas will account for 38 percent of the country’s net electricity generation under the CPP, but that number declines to 34 percent without the CPP “That would be a big feather in the nation’s cap, definitely,” said Ed Hirs, energy economist at the University of Houston, regarding the U.S. Energy Information Administration’s annual energy outlook that came out earlier this week.

The EIA looked at the nation’s energy landscape through 2040 and made projections based on whether the Obama administration’s Clean Power Plan is implemented or not.

Gas is the world’s fastest growing major fuel, and the big importers will require more imports. As a nation, we have an obligation to support our companies looking to export natural gas, because it helps to reduce global CO2 emissions, supplies modern energy to an overwhelmingly still poor and energy-short world, and buffers the gaining influence of the Gas Exporting Countries Forum, a “gas OPEC” set into motion by Vladimir Putin that holds nearly 70% of the world’s proven reserves.

Natural Gas Weekly Weather Outlook

May 20-26th: Numerous weather systems will impact the US into next week with heavy showers and thunderstorms. Although, temperatures will gradually warm over the Great Lakes and northeastern US into the upper 60s and 70s, while it will remain warm over the southern US where mostly 70s and 80s are expected, but with limited coverage of 90s due to heavy showers. For the West, weather systems with cooling will arrive off the Pacific this weekend into next week. Overall, an active Spring pattern continues with mostly upper 60s to 80s, but still with areas of heavy rainfall. Demand the next 7 days will be LOW.

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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