Natural Gas Fundamental Analysis – November 25, 2015 – Forecast

Analysis and Recommendations:

Natural Gas dipped 63 points to trade at 2.280 as weather remained warm across the US. Predictions for the weekly inventory are expecting a strong climb with a report due early because of the US holiday. The U.S. Energy Information Administration said natural gas supplies in storage rose by 15 billion cubic feet last week, below expectations for an increase of 18 billion. Total U.S. natural gas storage stood at a record-high of 4.000 trillion cubic feet, 10.1% higher than levels at this time a year ago and 5.2% above the five-year average for this time of year. Last spring, supplies were 55% below the five-year average, indicating producers have more than made up for all of last winter’s unusually strong demand.

Investors warned that stockpile buildups will probably continue for at least another week, two weeks beyond what is normal, due to tepid winter heating demand so far. Inventories of the gas are typically built up during the warm summer months and then drawn down in the winter as cold temperatures increase demand for the fuel.

Natural gas prices fell to a four-week low Friday due to rising inventories and weak demand. Moderate weather and robust production have pushed the market into oversupply in recent months. Stockpiles of natural gas rose to 4 trillion cubic feet for the first time on record in the week ended Nov. 13, according to the Energy Information Administration.

Forecasts for colder temperatures boosted prices Monday. About half of U.S. households use natural gas as a primary heating fuel, and cold weather leads to higher consumption.

Natural Gas Weekly Weather Outlook

November 20-25th: A strong weather system and associated cold blast will track across the central and eastern US this weekend, with a swath of snowfall through the central Plains and lower Midwest. This will drop temperatures over the northern US into the teens and 20s, with 30s deep into Texas and the Southeast. Another reinforcing cold blast will follow Sunday Night into Monday before warm high pressure returns by the middle of the week. The Western US will be mostly mild and dry this weekend, apart from the Northwest where a Pacific system will push inland. This storm will strengthen early next week with increasing valley rains and mountain snows, including into California, with a more impressive cold blast to follow at the end of the week. Overall demand will increase to HIGH Saturday-Thursday then back to MODERATE.

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)