Natural Gas Fundamental Forecast – September 7, 2016

Natural Gas fell 33 points to 2.759 as summer temperatures fell and the threat of the hurricane vanished. Natural gas is expected to start hunting for a bottom. Last week before the holiday the U.S. Energy Information Administration said natural-gas stockpiles grew by 51 billion cubic feet last week, compared to the 43 bcf expected by forecasters surveyed by The Wall Street Journal. The report is a widely watched measure of supply and demand. A larger-than-expected addition to storage likely indicates greater supply or smaller-than-expected demand.

Losses mounted throughout the morning and doubled after the EIA’s report. Futures for October delivery settled down 9.5 cents, or 3.3%, at $2.792 a million British thermal units on the New York Mercantile Exchange. It is the lowest settlement since Aug. 23, and the largest daily percentage loss since Aug. 19.

Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning. But with autumn due to start on September 22, power burns to feed air conditioning demand have probably peaked for now, market analysts said.

Natural Gas Weekly Weather Outlook (www.natgasweather.com)

Sept 1-7th: TS Hermine will make landfall over the Florida Friday with gusty winds and heavy rain. It will then track up the East Coast where it will merge with a cool front coming out of the Midwest to provide heavy showers and cooler temperatures. Although, unseasonably strong high pressure is expected to return next week east of the Rockies with above normal temperatures returning. Over the West, cooler conditions are expected as Pacific weather system move inland. Overall, nat gas demand will be MODERATE through the weekend and then HIGH next week with the southern and eastern US warming above normal.

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