Natural Gas Fundamental Forecast – May 6, 2016

Natural Gas moved up 5 points as summer temperatures are forecast to arrive. The energy product is trading at 2.146 ahead of the weekly inventory report due in a few hours. Strong production combined with weak demand this winter resulted in natural gas inventories that were 48.2% above their five-year average for the week ending on April 22, 2016. The warmer winter was due to the El Niño phenomenon. On May 2, natural gas futures closed at $2.04. Natural gas futures were trading 2.4% above their 100-day moving average and 0.3% above their 20-day moving average. The above graph shows natural gas futures relative to key moving averages.

In a report just recently published found that U.S natural gas net imports fell to 2.6 billion cubic feet per day in 2015, continuing a decline that began in 2007 when net imports of natural gas exceeded 10 Bcf/d.

Net LNG imports accounted for 19 percent of total U.S. net imports of all natural gas in 2007 but fell to 7 percent in 2015.

However, certain parts of the United States, such as New England, still depend on LNG imports because of their limited access to domestically produced natural gas.

U.S. natural gas net imports from Canada have remained relatively stable since 2011, the report said.

Although U.S. natural gas consumption and production have grown in recent years, natural gas production has grown slightly faster, resulting in a decline in net imports.

Rising domestic natural gas production has also helped reduce U.S. reliance on imported natural gas and help keep U.S. natural gas prices relatively low.

Natural Gas Weekly Weather Outlook

May 4-10th: A fresh cool blast out of Canada is sweeping across the Great Lakes and Mid-Atlantic with showers and slightly cooler than normal temperatures. This will bring a minor bump in nat gas demand the next couple days due to lows dropping in the 40s, although will be followed by mostly comfortable temperatures this weekend and much of next week. There will still be numerous weather systems east of the Rockies that bring heavy showers and slight cooling, but mostly mild to warm overall with highs mainly in the 60s to 80s. Across the West, weather systems will arrive off the Pacific with showers and modest cooling into 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)