Natural Gas Fundamental Analysis – November 16, 2015 – Forecast

Analysis and Recommendations:

Natural Gas recovered 34 points ahead of today’s delayed weekly inventory report. NG is trading at 2.294 as traders bought up the cheap commodity which is still looking for a bottom. The Weekly Natural Gas Storage Report – brought out by the Energy Information Administration (EIA) every Thursday since 2002 – includes updates on natural gas market prices, the latest storage level estimates, recent weather data and other market activities or events.

The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of natural gas. It is an indicator of current gas prices and volatility that affect businesses of natural gas-weighted companies and related support plays.

But natural gas prices are way off the heights reached some years back. From a peak of about $13.50 per MMBtu in 2008 to below $3 now – sinking in between to a 10-year low of under $2 in 2012 – the plummeting value of natural gas represents a decline of around 80% over seven years.

With production from the major shale play remaining strong and the commodity’s demand failing to keep pace with this supply surge, natural gas prices have been held back. Even the summer cooling demand has been of little help.

Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on early-winter heating demand. The heating season from November through March is the peak demand period for U.S. gas consumption. Meanwhile, the U.S. Energy Information Administration’s next storage report on Friday is expected to show a build of approximately 51 billion cubic feet for the week ending November 6.

Natural Gas Weekly Weather Outlook

November 10-16th: A mild weather system over the southeast will track up along the East Coast with areas of heavy showers today. High pressure will follow in its wake as it expands out of the central US ahead of a Pacific weather system pushing through the West. Temperatures over the eastern US will warm 10-15°F above normal by Wednesday, while 10-20°F below normal over the interior West where valley rains and mountain snows will continue. This system will bring lows of teens and 20s over the interior West and Plains over the coming days, with 30s into the northern TX. This system will then track into the East Friday through this weekend, increasing national nat gas demand before easing early next week as another Pacific system drops into the West, pushing milder ridging back across the East. Overall nat gas demand this week will be MODERATE, locally LOW.

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)