Natural Gas Fundamental Forecast – May 2, 2016

Natural Gas dipped 3 points to 2.280 after yesterday’s official EIA inventory and warmer temperatures. US natural gas storage report from the US Energy Information Administration (EIA) recorded an increase of 73bn cubic feet (Bcf) compared with expectations of a build of around 71bn and a build of 7bn Bcf the previous week.

Inventories were just under 870 Bcf, higher than this time last year and over 832 Bcf above the five-year average. Overall stocks are running at 2.56trn Bcf level and, after some progress over the past few weeks, stocks are back being above the ceiling of the five-year range, which suggests the potential for renewed weakness in prices unless demand strengthens significantly.

Economics Calendar reported that natural gas futures were crushed over the 2015-2016 winter as mild weather conditions followed a heavy injection season. Natural gas futures have performed better than expected since hitting a 17-year low in late winter, due to a late season cold snap and the expectation that natural gas producers would curb output this season to prevent being hammered by low prices next season, if mild conditions persist for another season. However, the latest inventory data suggests that natural gas producers will continue to output a high level of the commodity.

Natural Gas Weekly Weather Outlook

April 27- May 3: Warm temperatures continue over the South and Southeast, including Texas with plenty of upper 60s to 80s, locally 90s. However, temperatures are cooler over the central and northern US where weather systems are tracking through with showers and thunderstorms, including another round of dangerous severe storms today coming out of the Plains. Precipitation will be widespread the rest of this week over the northern and eastern US, which will bring slightly cooler than normal conditions, while remaining slightly warmer than normal over the southern US. Overall, much of the country will experience LOW nat gas demand, but locally MODERATE.

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.

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)