Natural Gas Fundamental Analysis – August 18, 2015 – Forecast

Analysis and Recommendations:

Natural Gas dipped 25 points as traders watched oil prices fall and the warmer temperatures expected over the weekend did not reach forecast temperatures. NG is trading at 2.776. The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks increased by 65 billion cubic feet for the week ending August 4. Analysts polled by The Wall Street Journal expected a storage injection (increase) of 55 billion cubic feet. The five-year average for the week is an increase of around 48 billion cubic feet, and last year’s addition for the week totaled 79 billion cubic feet.

Natural gas futures for October delivery traded down about two cents in advance of the EIA’s report, at around $2.94 per million BTUs, and dipped to about $2.87 following release of the report. Last Thursday, natural gas closed at $2.83 per million BTUs, and over the past five trading days, natural gas futures peaked Wednesday at $2.96. The 52-week low for natural gas futures is $2.64. One year ago the price for a million BTUs was around $3.90.

High temperatures in Texas and the Southeast kept demand up last week and those temperatures have continued into this week. Slightly cooler temperatures are expected in the region beginning this weekend, but temperatures are expected to rise in the Northwest, the Great Lakes region and the Northeast, and with the higher temperatures come higher demand for cooling and increased demand for natural gas to generate electricity.

AccuWeather US Forecast Outlook:

A hot dome of high pressure will dominate the southern US with temperatures underneath in the upper 80s to lower 100s, although not as hot as recent days. It will be cool over the NW, Great Lakes, and NE through early Friday before the hot ridge expands north and east through this weekend. This weekend into early next week, a cut off low pressure system will bring showers and slight cooling to the southern US, while the hot ridge shifts northward with upper 80s to lower 90s gaining ground. This will result in HIGH demand for cooling over the much of the coming week.

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 up to the data analysis and information in our weekly reports.

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)