Natural Gas Weekly Fundamental Analysis September 17-21, 2012, Forecast

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Introduction: Natural gas is nevertheless a major commodity in its own right, which is used for everything from cooking food to heating houses during the winter. Natural Gas is growing much faster than either of its non-renewable fossil fuel competitors, oil and coal.

Do not miss the weekly U.S. gas inventories report. The figures are issued by the Energy Information Administration (EIA) every Thursday afternoon at 15:30 (released Friday at 15:30 if there was a U.S. bank holiday on Monday). Here’s a link to the latest EIA report. The main natural gas moving figure in there is the change in inventories from the previous week. When it comes to the gas inventories report, we’re talking about billions of cubic feet, Bcf for short.

When the actual change in inventories number is released, it is the deviation from the expected number that is really important. If the actual inventories figure shows a 24 Bcf rise when an 84 Bcf increase was expected, then that is actually positive for the price of natural gas. All else equal, the price of natural gas should rise after the release.

A barrel of oil has roughly 6 times the energy content of natural gas. If the fuels were perfect substitutes, oil prices would tend to be about 6 times natural gas prices. However, due to various market characteristics discussed briefly above and the ease of using oil, the price of oil has been following a pattern of 8-12 times that of natural gas. However that ratio has spiked dramatically since March 2009.

Weekly Analysis and Recommendation:

Natural Gas is about the only commodity that did not soar this week, as injection inventory showed a higher than expected inventory and moderate temperatures reduced consumer demand.

Date

Last

Open

High

Low

Change %

Sep 14, 2012

2.955

3.027

3.062

2.922

-2.41%

Sep 13, 2012

3.028

3.067

3.068

2.962

-1.21%

Sep 12, 2012

3.065

3.018

3.071

2.950

1.59%

Sep 11, 2012

3.017

2.837

3.026

2.803

6.34%

Sep 10, 2012

2.837

2.659

2.845

2.655

6.75%

There are two storms in the Atlantic but not really at the point of pushing prices. The only support natural gas received was the drop in the USD which helped offset some of the price declines.

FxEmpire provides in-depth analysis for each currency and commodity 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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Major Economic Events for the week of September 10-14, 2012 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Time

Currency

Event

Actual

Forecast

Previous

Sep. 11

00:01

GBP

RICS House Price Balance 

-19%

-22% 

-23% 

 

06:30

EUR

French Non-Farm Payrolls (QoQ) 

-0.1%

-0.1% 

-0.1% 

 

09:30

GBP

Trade Balance 

-7.2B

-9.0B 

-10.1B 

 

13:30

USD

Trade Balance 

-42.0B

-44.0B 

-41.9B 

 Sep. 12

06:30

EUR

French CPI (MoM) 

0.7%

0.5% 

-0.4% 

 

07:00

EUR

German CPI (MoM) 

0.4%

0.3% 

0.3% 

 

07:00

EUR

German CPI (YoY) 

2.1%

2.0% 

2.0% 

 

09:30

GBP

Average Earnings Index +Bonus 

1.5%

1.6% 

1.8% 

 

09:30

GBP

Claimant Count Change 

-15.0K

0.5K 

-13.6K 

 

10:00

EUR

Industrial Production (MoM) 

0.6%

-0.1% 

-0.6% 

 

13:30

USD

Import Price Index (MoM) 

0.7%

1.4% 

-0.7% 

 

18:00

USD

10-Year Note Auction 

1.764%

 

1.680% 

 Sep. 13

08:15

CHF

PPI (MoM) 

0.5%

-0.4% 

-0.3% 

 

08:30

CHF

Interest Rate Decision 

0.00%

0.00% 

0.00% 

 

13:30

USD

Core PPI (MoM) 

0.2%

0.2% 

0.4% 

 

13:30

USD

PPI (MoM) 

1.7%

1.1% 

0.3% 

 

13:30

USD

Initial Jobless Claims 

382K

370K 

367K 

 

13:30

USD

Continuing Jobless Claims 

3283K

3318K 

3332K 

 

13:30

USD

PPI (YoY) 

2.0%

1.4% 

0.5% 

 

13:30

USD

Core PPI (YoY) 

2.5%

2.6% 

2.5% 

 

17:30

USD

Interest Rate Decision 

0.25%

0.25% 

0.25% 

 

19:00

USD

Federal Budget Balance 

-191.0B

-155.0B 

-69.6B 

Sep. 14

10:00

EUR

CPI (YoY) 

2.6%

2.6% 

2.6% 

 

10:00

EUR

Employment Change (QoQ) 

0.0%

-0.2% 

-0.2% 

 

10:00

EUR

Core CPI (YoY) 

1.5%

1.7% 

1.7% 

 

13:30

USD

Core CPI (MoM) 

0.1%

0.2% 

0.1% 

 

13:30

USD

Core Retail Sales (MoM) 

0.8%

0.6% 

0.8% 

 

13:30

USD

CPI (MoM) 

0.6%

0.5% 

0.0% 

 

13:30

USD

Retail Sales (MoM) 

0.9%

0.7% 

0.6% 

 

13:30

USD

CPI (YoY) 

1.7%

1.7% 

1.4% 

 

13:30

USD

Core CPI (YoY) 

1.9%

2.0% 

2.1% 

 

14:15

USD

Industrial Production (MoM) 

-1.2%

0.2% 

0.5% 

 

14:55

USD

Michigan Consumer Sentiment 

79.2

74.0 

74.3 

Historical: From 2010 to Present

Highest: 6.106 on Jan 07, 2010

Average: 3.836 over this period

Lowest: 1.903 on April 19, 2012 

 

WEEKLY

 

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD

Date

Time

Currency

Event

Forecast

Previous

 Sep. 17

13:30

USD

NY Empire State Manufacturing Index 

-2.0 

-5.8 

Sep. 18

09:30

GBP

CPI (YoY) 

2.5% 

2.6% 

 

09:30

GBP

CPI (MoM) 

0.5% 

0.1% 

 

10:00

EUR

German ZEW Economic Sentiment 

-19.0 

-25.5 

 

13:30

USD

Current Account 

-126.0B 

-137.3B 

 

14:00

USD

TIC Net Long-Term Transactions 

 

9.3B 

Sep. 19 

13:30

USD

Building Permits 

0.800M 

0.811M 

 

13:30

USD

Housing Starts 

0.765M 

0.746M 

 

15:00

USD

Existing Home Sales 

4.56M 

4.47M 

Sep. 20 

07:58

EUR

French Manufacturing PMI 

46.4 

46.0 

 

08:28

EUR

German Manufacturing PMI 

45.3 

44.7 

 

09:30

GBP

Retail Sales (MoM) 

-0.4% 

0.3% 

 

09:30

GBP

Retail Sales (YoY) 

2.7% 

2.8% 

 

11:00

GBP

CBI Industrial Trends Orders 

-15 

-21 

Government Bond Auction

Date Time Country 

Sep 17 09:10 Slovakia

Sep 17 10:00 Norway 

Sep 18 08:30 Spain 

Sep 18 09:10 Greece 

Sep 18 09:30 Belgium 

Sep 19 09:10 Sweden 

Sep 19 09:30 Germany 

Sep 19 09:30 Portugal 

Sep 19 10:00 Norway 

Sep 20 08:30 Spain 

Sep 20 08:50 France 

Sep 20 09:30 UK 

Sep 20 09:50 France 

Sep 20 15:00 US 

Sep 20 17:00 US 

Sep 21 15:30 Italy  

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