Natural Gas Fundamental Analysis – December 1, 2015 – Forecast

Analysis and Recommendations:

Natural Gas is flat but trading near its bottom at 2.212 after falling steadily over the holiday weekend as traders are expecting warmer weather and higher inventory. there are huge supplies of natural gas in stockpiles across the United States. Wide contango is often a sign that supply is greater than demand. The second reason for the width of the natural gas spread is seasonality. As we are coming into the heart of winter, the futures prices during historically cold month’s trade at higher prices than less cold months. This creates a double whammy of contango for natural gas prices. We have seen this when the November contract expired and once again when the December contract expired last week.

In Chicago, parts of the Midwest and Colorado the snows have already begun to fall with some areas receiving 20 inches of the white powder before Thanksgiving. Winter’s chill is upon and with that comes increased demand for heating. However, the price of natural gas has not responded and it has continued to fall. It is virtually certain that 2015 will be the warmest year on record, with one of the strongest El Niños ever recorded combining with manmade warming to send global temperatures soaring. But which of these is more responsible for the record heat this year?

Global warming fueled by the buildup of heat-trapping gases in the atmosphere is the overwhelming contributor, according to a new analysis by scientists involved with Climate Central’s World Weather Attribution program and at the University of Reading.

Natural Gas Weekly Weather Outlook

November 25-Dec 1st: Warm high pressure will rapidly build out of Texas and the South the next few days, expanding across the Midwest and East with temperatures again warming 8-18°F above normal as high reaches the 50s north to 70s south. As the East warms, the West will become cold as a strong weather system drops down the coast with rain and low elevation snow, including across California. A secondary cold blast will spill into the Rockies and Plains Thanksgiving Day and then spread south and east this weekend, although moderating due to the lack of reinforcing cold. Overall heating demand will be LOW-MODERATE over the coming week due to the milder East.

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.

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Natural Gas Weekly Update
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