Natural Gas Fundamental Forecast – May 3, 2016

Natural Gas is trading at 2.13 down by 48 points as traders started booking profits after last week’s climb. Natural gas prices retreated from a fresh two-month high and inched lower as traders and analysts remained divided about the impact of falling production and heavy stockpiles. Stockpiles are also still coming off a record high after mild weather has damped demand for the heating fuel. Coal, which competes with gas for demand in the power sector, is also stockpiled at high levels at power plants, and a mild boost in weather-related demand in the weeks to come might not be enough to trim the glut significantly, analysts said.

The updated forecasting models suggest mild weather across several parts of the US over early May 2016. Mild weather curbs the heating demand, and the demand for natural gas drops. Half of all US homes use natural gas for heating. Consequently, this could negatively affect natural gas prices as weak demand adds to the inventory. The expectation of cold weather supported natural gas prices last week. Prices rallied almost 5% week-over-week for the week ended April 21, 2016. Temperatures in the Lower 48 were 10% above normal and 3% above the same period in 2015.

Natural Gas Weekly Weather Outlook

April 29- May 4: Weather systems will track across the country over the coming week, highlighted by another strong and dangerous Spring storm tracking out of the West and into the central US this weekend with heavy showers and powerful thunderstorms. In addition, a cool blast over southern Canada will graze the upper Great Lakes and New England with cooling. Overall, temperatures will be slightly cool over the northern US with highs of 50s and 60s, while slightly warm over the southern US with highs in the 70s and 80s, besides locally 90s over Texas. The West will be slightly cool to end the week but warming back above normal by early next week. Overall, much of the country will experience LOW to MODERATE nat gas demand.

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)