Advertisement
Advertisement

Natural Gas Fundamental Analysis October 10, 2014 Forecas

By:
James Hyerczyk
Updated: Aug 24, 2015, 23:00 UTC

Analysis and Recommendations: December Natural Gas futures fell to their lowest level since September 8 despite a friendly weekly supply/demand report

NATURAL GAS

Analysis and Recommendations: December Natural Gas futures fell to their lowest level since September 8 despite a friendly weekly supply/demand report from the Energy Information Administration. On Thursday, the EIA reported that U.S. natural gas stocks increased by 105 billion cubic feet for the week-ending October 3. Trader had priced in an expected increase of 108 billion cubic feet. The five-year average for this week is 84 billion cubic feet.

NATURAL GAS
NATURAL GAS

Natural Gas futures continued to consolidate near the low end of its two month range as traders adjusted their positions to shifts in supply and changing weather patterns. Prices were under pressure most of the week due to last week’s surge in supply and a warmer weather pattern in several key demand areas.

The consolidation taking place is typical for this time of year known as the “shoulder season”. This is the time when the weather is neither too hot nor too cold to trigger any significant shifts in demand from consumers. At the same time, producers are trying to supply as much gas to the market as they can ahead of the winter heating season.

Last year’s natural gas rally started on November 8 at much lower price levels and much higher supply levels. This year, stockpiles are about 10.1% below their levels of a year ago and about 10.5% below the five-year average. With the heating season rapidly approaching, U.S. stock piles are expected to be at about 3.55 trillion cubic feet, the lowest level since 2008, but still considered adequate. In 2013, the heating season started with 3.8 trillion cubic feet in inventory.

If the better-than-expected couldn’t turn the market higher on Thursday then look for renewed selling pressure today. There may be a short-covering rally into the close if traders decide to book profits ahead of the week-end.

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 

Today’s Economic Releases 

                Currency                                                  Event                                                     Forecast        Previous

                 

                 EUR                                          French Industrial Production                                 -0.2%             0.2%

                 GBP                                          Trade Balance                                                       -9.6B             -10.2B

                 CAD                                          Employment Change                                            18.7K            -11.0K

                 CAD                                          Unemployment Rate                                              7.0%              7.0%

                 USD                                          Import Prices m/m                                                -0.5%             -0.9%

                 USD                                          FOMC Member Plosser Speaks

                 ALL                                           IMF Meetings

                 CAD                                          BOC Business Outlook Survey

                 ALL                                           G20 Meetings

                 USD                                          FOMC Member Fisher Speaks

Daily Nearby Natural Gas
Daily Nearby Natural Gas

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Did you find this article useful?

Advertisement