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Barry Norman
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Natural Gas Fundamental Analysis October 14, 2014 Forecast

Analysis and Recommendations:

Natural Gas  gained 11 points to trade at 3.870 with no real news or direction trading continues to support the 3.87 price level. Natural gas demands in is expected to decrease by 9 percent in 2014 compared to 2013. The first half of 2014 saw a significant decrease of 18 percent in gas demand, compared with the same period in 2013.  The dramatic decline in gas consumption in the first half of the year is mainly the result of the very mild weather. Natural gas futures gained in New York for the first time in three days on forecasts for cooler-than-normal weather that would spur demand for the heating fuel.

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Temperatures may be below average on the East Coast from Oct. 20 through Oct. 24, according to MDA Weather Services in Gaithersburg, Maryland. The low in New York on Oct. 21 may be 39 degrees Fahrenheit (4 Celsius), 9 less than usual, data from AccuWeather Inc. show. Gas stockpiles were 11 percent below the five-year average in the week ended Oct. 3, the biggest deficit for the time of year since at least 2005.

The other main factors for the drop in gas demand were the slow economic recovery, low coal costs in direct competition with gas, and the growing share of electricity generation from renewables which has become more desirable due to environmental concerns.

Spanish energy firm Gas Natural SDG SA said Monday that its planned purchase of Chile’s Compania General de Electricidad will have no immediate effect on its financial targets for next year.

Speaking on a conference call, Gas Natural executives said they would review their 2015 strategic plan at a future date.  The 2014 worldwide working gas capacity grew annually by five percent with Iran’s contribution from the only underground gas storage in the Middle East, according to Cedigaz’s statement released last week. The worldwide storage capacity stands at 399 bcm according to the recent data.

The commissioning of the Shourijeh storage in Iran supports Iran’s aim to decrease the amount of gas imports from Turkmenistan. The Shourijeh facility, located 25 kilometers southeast of Sarakhs in northwestern Iran which can store up to 4.8 bcm of gas, raised the Iranian capacity to slightly more than 6 bcm.

Asia followed the Middle East with a 15 percent increase with the new facilities coming online in China. China aims to increase gas in a total energy mix from 4 percent to 10 percent by 2020 and to develop a 90 bcm storage capacity.

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)

Today’s economic releases actual vs. forecast:

 

Cur.

 

Event

Actual

Forecast

Previous

 

 

Holiday

Japan – Health-Sports Day

 

 

Holiday

Canada – Thanksgiving Day

 

  CNY

 

Exports (YoY) (Sep)

15.3%

11.8%

9.4%

 

 

  CNY

 

Imports (YoY) (Sep)

7.0%

-2.7%

-2.4%

 

 

  CNY

 

Trade Balance (Sep)

31.00B

41.00B

49.83B

 

 

Upcoming Economic Events that you should be monitoring:

 

Cur.

Event

Actual

Forecast

Previous

 

  AUD

RBA Asst Gov. Debelle

 

 

 

 

 

  CNY

New Loans

 

750B

703B

 

 

  EUR

French CPI

 

-0.3%

0.4%

 

 

  EUR

French HICP

 

-0.3%

0.5%

 

 

  EUR

Spanish CPI

 

0.2%

0.2%

 

 

  GBP

CPI (MoM) (Sep)

 

0.2%

0.4%

 

 

  GBP

CPI (YoY) (Sep)

 

1.4%

1.5%

 

 

  GBP

PPI Input (MoM) (Sep)

 

-0.4%

-0.6%

 

 

  EUR

Italian CPI (MoM) (Sep)

 

-0.3%

-0.3%

 

 

  EUR

Industrial Production

 

-1.6%

1.0%

 

Government Bond Auction

Date Time Country Auction

Oct 14 08:30 Spain 6 & 12M T-bill auction

Oct 14 09:30 Belgium 3 & 12M T-bill auction (Jan & Oct 2015)

Oct 15 09:03 Sweden Bond auction

Oct 15 09:30 Germany Eur 4.0bn Sep 2016 Schatz auction

Oct 16 08:30 Spain Bono/Obligacion auction

Oct 16 09:30 UK Auctions 0.125% 2024 I/L Gilt

Oct 16 15:00 US Announces details of 30Y TIPS auction on Oct 23

 

 

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