Natural Gas Fundamental Forecast – June 21, 2016

Natural Gas gained 44 points to 2.667 as temperatures across the US soared to summer highs. U.S. natural gas futures held near the prior session’s nine-month highs on Tuesday, as forecasts for continued above-normal temperatures across most parts of the U.S. over the next two weeks continued to provide support. Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.

U.S. natural gas speculators boosted their net longs for a third consecutive week, betting prices will rise as production eases and power demand picks up to absorb some of the record high amount of fuel left in inventories after a warm winter.

Speculators in four major NYMEX and ICE markets added to their bullish bets by 27,431 contracts to 81,821 in the week to June 14, the U.S. Commodity Futures Trading Commission said on Friday.

To avoid filling storage caverns to their maximum capacity after a warm winter left stockpiles at record highs, analysts said prices will likely remain low this year to pressure producers to cut output and encourage power generators to burn more gas instead of coal.

Natural Gas Weekly Weather Outlook (www.natgasweather.com)

June 17-23rd: A weather system over the West will bring cooler than normal temperatures with highs only into the 60s. But most importantly, hot high pressure over Texas and the central and southern US will continue to bring widespread highs of 90s to 100s, which will then shift over the Southwest and California with extreme heat of 100-123°F. A weather system with showers and cooling will arrive into the Southeast this weekend, but overall, very warm to hot conditions will dominate large stretches of the central and southern US, then expanding to the Southwest with record breaking heat. Overall, nat gas demand will be MODERATE to locally HIGH.

FxEmpire provides in-depth analysis for each asset 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, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

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