Natural Gas Monthly Fundamental Forecast February 2014

Outlook and Recommendation

Natural Gas ended the month well above its historic and its recent trading range at 4.875 but off its record high of 5.481 just a few days ago. Traders sold off to book profits at the end of the week after Natural gas had a few spectacular days earlier in the week. The commodity soared almost 18% in one single day. Back on Nymex, natural-gas futures posted a weekly loss for the first time in three weeks as prices continued their retreat from a hefty rally on Wednesday. Based on the most-active contracts, prices were down 1.1% for the week, but clung to a gain of about 18% for the month. Compared to the February contract close on Dec. 31, which was the front month at that time, prices lost 17%. The February futures contract for natural gas expired at the Nymex close on Wednesday, which contributed to market volatility ahead of the weekly U.S. supply data released Thursday. The data showed a 230 billion-cubic-foot decline in natural-gas inventories as of the week ended Jan. 24. The drop generally matched market expectations.

A new study predicts that natural gas prices will remain stable over the next two decades due to sustained levels of shale production. The report, “Fueling the Future with Natural Gas: Bringing it Home” by IHS CERA, predicts that natural gas prices in North America will range from $4 to $5 per 1,000 cubic feet in 2012 dollars through 2035, and notes an number of opportunities for an increase in natural gas use. According to the study, over the next 15 years, an average residence that uses natural gas for heat will save $5,731 compared to an all-electric home.

“This means that the North American natural gas resource base can accommodate significant increases in demand without requiring a significantly higher price to elicit new supply,” Tim Gardner, IHS vice president, said in a news release. The study noted that gas prices will fluctuate in the coming years but will maintain a steep discount to the equivalent amount of crude oil.

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

 

WEEKLY DATA

This Week in Petroleum

Gasoline and Diesel Fuel Update

Weekly Petroleum Status Report

Heating Oil & Propane Update (October – March)

Weekly Coal Production
Weekly NYMEX Coal Futures

Coal News & Markets

Natural Gas Weekly Update

Weekly Natural Gas Storage Report