Natural Gas Weekly Fundamental Analysis, August 3 – August 7, 2015 Forecast

Weekly Analysis and Recommendation:

September Natural Gas futures finished the week lower. The catalyst behind the selling was the U.S. Energy Information Administration (EIA) which reported that the natural gas in storage rose by 52 billion cubic feet (bcf) for the week-ending July 24. Industry analysts and traders were looking for a 55 bcf rise.

Oversupply concerns continue to be the main driving force behind the selling pressure. Last week ended with the market down for the fifth session out of ten. Prices are down more than 3% year-to-date.

It’s difficult to find a bullish piece of fundamental news anywhere. Most of the recent rallies have been capped and have most likely been related to position-squaring or profit-taking rather than a shift in the fundamentals. The market could become range bound over the near-term if buyers continue to come in to defend the historical lows and sellers keep on building short positions.

Going into this week, natural gas stocks are 25% more than the level of 2,294 bcf last year. There is also 3% more gas in storage than the five-year average of 2,795 bcf. Natural gas stocks have also risen for 17 consecutive weeks.

Continue to look for inventories to build and prices to weaken as long as demand remains slow and the weather is mild.

From the production side, continue to monitor the rig count for any sudden declines that could shock the market.

On the upside, 3.00 remains the key number to overcome. On the downside, there are two bottoms at 2.600 and 2.589. Traders may decide to play the range for a while. However, if 2.589 fails miserably then 2.440 is the next likely target.

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.

AccuWeather US Forecast Outlook: 

Next week’s weather outlook suggests cooler temperatures farther west, leading to the possibility of higher builds next week. A cold front is expected to stretch from the eastern Great Lakes to the lower Mississippi Valley on Thursday, while stormy weather develops across the Southwest. 

Economic Events: 

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)