Natural Gas Fundamental Forecast – May 4, 2016

Natural Gas added 16 points to trade at 2.058 recovering yesterday decline and supported by the falling US dollar. Last week’s inventory climbed again and without a decline in production, natural gas prices will have low demand season to contend with, and this could mean more downside pressure. Weather forecasts show that in the coming week temperatures should be about average, which means there will be little support for natural gas prices, at least from the demand perspective.

Adding to the downside on Monday was the forecasts for mild weather across much of the U.S. This meant that there was little reason to expect increase natural gas for heating or cooling. Mild temperatures are expected for much of the U.S. through mid-May.

We are officially in the shoulder season for natural gas demand; after the winter cold snap but before the hot summer when demand for natural gas to generate electricity to power air conditioners increases. Summer demand season is typically less than winter; however, this past winter was so disappointing with extremely mild conditions that a hot summer could provide enough of a demand increase that the commodity could see some upside, particularly if the recent pattern of decreased production continues. Recent pipeline data has indicated that output of natural gas is declining; however, the market remains well-supplied with stockpiles about 48% higher than the normal average for this time of year from the Economics Calendar report.

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)