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Natural Gas Weekly Fundamental Analysis December 17-21, 2012, Forecast

By:
Barry Norman
Updated: Aug 21, 2015, 01:00 UTC

Introduction: Natural gas is nevertheless a major commodity in its own right, which is used for everything from cooking food to heating houses during the

Natural Gas Weekly Fundamental Analysis December 17-21, 2012, Forecast

Natural Gas Weekly Fundamental Analysis December 17-21, 2012, Forecast
Natural Gas Weekly Fundamental Analysis December 17-21, 2012, Forecast
Introduction: Natural gas is nevertheless a major commodity in its own right, which is used for everything from cooking food to heating houses during the winter. Natural Gas is growing much faster than either of its non-renewable fossil fuel competitors, oil and coal.

Do not miss the weekly U.S. gas inventories report. The figures are issued by the Energy Information Administration (EIA) every Thursday afternoon at 15:30 (released Friday at 15:30 if there was a U.S. bank holiday on Monday). Here’s a link to the latest EIA report. The main natural gas moving figure in there is the change in inventories from the previous week. When it comes to the gas inventories report, we’re talking about billions of cubic feet, Bcf for short.

When the actual change in inventories number is released, it is the deviation from the expected number that is really important. If the actual inventories figure shows a 24 Bcf rise when an 84 Bcf increase was expected, then that is actually positive for the price of natural gas. All else equal, the price of natural gas should rise after the release.

A barrel of oil has roughly 6 times the energy content of natural gas. If the fuels were perfect substitutes, oil prices would tend to be about 6 times natural gas prices. However, due to various market characteristics discussed briefly above and the ease of using oil, the price of oil has been following a pattern of 8-12 times that of natural gas. However that ratio has spiked dramatically since March 2009.

Weekly Analysis and Recommendation:

Natural Gas tumbled all week as investors turned their backs on the commodity, which was just a week ago trading at recent highs of 3.9999. This week fell to a low of 3.263 to close at 3.30. Global forecast for this year had set price range for NG around 3.32, investors just a few months ago pushed NG to below the 3.00 price range and then pushed it to record highs and then dumped it for profit.

Date

Last

Open

High

Low

Change %

Dec 14, 2012

3.300

3.349

3.362

3.263

-1.43%

Dec 13, 2012

3.349

3.401

3.406

3.293

-1.57%

Dec 12, 2012

3.402

3.414

3.446

3.366

-0.40%

Dec 11, 2012

3.416

3.430

3.493

3.393

-0.44%

Dec 10, 2012

3.430

3.489

3.503

3.416

-1.69%

The appeal of natural gas above the 3.00 price range becomes less attractive and producers need a price over 3.00 to produce gas profitably, leaving a small window for gas prices to vary, expect speculators have been taking advantage and talked up prices just to dump the commodity as oil is trading in low ranges as energy speculators jump from one to the other in hopes of pushing prices up or down.

With weather within seasonal norms there is not outside demand for natural gas at this time as production increases gas producers are hoping to get approval to export more gas to the global markets.

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.

Major Economic Events for the week of December 10-14 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

Event

Actual

Forecast

Previous

Dec. 10

CNY

Chinese Trade Balance 

19.60B

25.70B

32.00B

Dec. 11

GBP

RICS House Price Balance 

-9%

-7%

-7%

 

EUR

French Non-Farm Payrolls (QoQ) 

-0.3%

-0.3%

-0.3%

 

EUR

German ZEW Economic Sentiment 

6.9

-12.0

-15.7

 

EUR

ZEW Economic Sentiment 

7.6

0.1

-2.6

 

USD

Trade Balance 

-42.2B

-42.6B

-40.3B

 Dec. 12

EUR

German CPI (MoM) 

-0.1%

-0.1%

-0.1%

 

EUR

German CPI (YoY) 

1.9%

1.9%

1.9%

 

EUR

French CPI (MoM) 

-0.2%

0.0%

0.1%

 

GBP

Average Earnings Index +Bonus 

1.8%

1.9%

1.8%

 

GBP

Claimant Count Change 

-3.0K

7.0K

6.0K

 

EUR

Industrial Production (MoM) 

-1.4%

0.2%

-2.3%

 

USD

Import Price Index (MoM) 

-0.9%

-0.5%

0.3%

 

USD

10-Year Note Auction 

1.652%

 

1.675%

 

USD

Interest Rate Decision 

0.25%

0.25%

0.25%

 

USD

Federal Budget Balance 

-172.1B

-150.0B

-120.0B

 Dec. 13

CHF

PPI (MoM) 

0.0%

-0.3%

-0.1%

 

CHF

Interest Rate Decision 

0.00%

0.00%

0.00%

 

GBP

CBI Industrial Trends Orders 

-12

-16

-21

 

USD

Core PPI (MoM) 

0.1%

0.2%

-0.2%

 

USD

Core Retail Sales (MoM) 

0.0%

-0.1%

0.0%

 

USD

PPI (MoM) 

-0.8%

-0.5%

-0.2%

 

USD

Retail Sales (MoM) 

0.3%

0.5%

-0.3%

 

USD

Initial Jobless Claims 

343K

370K

372K

 

USD

Continuing Jobless Claims 

3198K

3210K

3221K

 

USD

PPI (YoY) 

1.5%

1.8%

2.3%

 

USD

Core PPI (YoY) 

2.2%

2.2%

2.1%

Dec. 14

CNY

Chinese HSBC Manufacturing PMI 

50.90

 

50.50

 

EUR

French Manufacturing PMI 

44.6

45.0

44.5

 

EUR

German Manufacturing PMI 

46.3

47.2

46.8

 

EUR

Manufacturing PMI 

46.3

46.6

46.2

 

EUR

CPI (YoY) 

2.2%

2.2%

2.2%

 

EUR

Employment Change (QoQ) 

-0.2%

0.0%

0.0%

 

EUR

Core CPI (YoY) 

1.4%

1.5%

1.5%

 

USD

Core CPI (MoM) 

0.1%

0.2%

0.2%

 

USD

CPI (MoM) 

-0.3%

-0.2%

0.1%

 

USD

CPI (YoY) 

1.8%

1.9%

2.2%

 

USD

Core CPI (YoY) 

1.9%

2.0%

2.0%

 

USD

Industrial Production (MoM) 

1.1%

0.3%

-0.7%

 

ARS

Argentinian CPI (MoM) 

0.9%

0.7%

0.8%

 

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD

Date

Time

Currency

Event

Forecast

Previous

 Dec. 17

13:30

USD

NY Empire State Manufacturing Index 

-1.0

-5.2

 

14:00

USD

TIC Net Long-Term Transactions 

 

3.3B

 Dec. 18

09:30

GBP

CPI (YoY) 

2.6%

2.7%

 

09:30

GBP

PPI Input (MoM) 

-0.1%

0.4%

 

09:30

GBP

CPI (MoM) 

0.2%

0.5%

 

09:30

GBP

PPI Input (YoY) 

-0.5%

0.1%

 

13:30

USD

Current Account 

-103.5B

-117.4B

Dec. 19

09:00

EUR

German Ifo Business Climate Index 

102.0

101.4

 

09:00

EUR

German Current Assessment 

108.0

108.1

 

09:00

EUR

German Business Expectations 

96.3

95.2

 

11:00

GBP

CBI Distributive Trades Survey 

25

33

 

13:30

USD

Building Permits 

0.875M

0.868M

 

13:30

USD

Housing Starts 

0.870M

0.894M

Dec. 20 

09:30

GBP

Retail Sales (MoM) 

0.3%

-0.8%

 

09:30

GBP

Retail Sales (YoY) 

1.5%

0.6%

Dec. 21

07:00

EUR

GfK German Consumer Climate 

5.9

5.9

 

09:30

GBP

Current Account 

-14.0B

-20.8B

 

09:30

GBP

GDP (QoQ) 

1.0%

1.0%

 

09:30

GBP

GDP (YoY) 

-0.1%

-0.1%

Major Economic Events for the week of December 10-14 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

Event

Actual

Forecast

Previous

Dec. 10

CNY

Chinese Trade Balance 

19.60B

25.70B

32.00B

Dec. 11

GBP

RICS House Price Balance 

-9%

-7%

-7%

 

EUR

French Non-Farm Payrolls (QoQ) 

-0.3%

-0.3%

-0.3%

 

EUR

German ZEW Economic Sentiment 

6.9

-12.0

-15.7

 

EUR

ZEW Economic Sentiment 

7.6

0.1

-2.6

 

USD

Trade Balance 

-42.2B

-42.6B

-40.3B

 Dec. 12

EUR

German CPI (MoM) 

-0.1%

-0.1%

-0.1%

 

EUR

German CPI (YoY) 

1.9%

1.9%

1.9%

 

EUR

French CPI (MoM) 

-0.2%

0.0%

0.1%

 

GBP

Average Earnings Index +Bonus 

1.8%

1.9%

1.8%

 

GBP

Claimant Count Change 

-3.0K

7.0K

6.0K

 

EUR

Industrial Production (MoM) 

-1.4%

0.2%

-2.3%

 

USD

Import Price Index (MoM) 

-0.9%

-0.5%

0.3%

 

USD

10-Year Note Auction 

1.652%

 

1.675%

 

USD

Interest Rate Decision 

0.25%

0.25%

0.25%

 

USD

Federal Budget Balance 

-172.1B

-150.0B

-120.0B

 Dec. 13

CHF

PPI (MoM) 

0.0%

-0.3%

-0.1%

 

CHF

Interest Rate Decision 

0.00%

0.00%

0.00%

 

GBP

CBI Industrial Trends Orders 

-12

-16

-21

 

USD

Core PPI (MoM) 

0.1%

0.2%

-0.2%

 

USD

Core Retail Sales (MoM) 

0.0%

-0.1%

0.0%

 

USD

PPI (MoM) 

-0.8%

-0.5%

-0.2%

 

USD

Retail Sales (MoM) 

0.3%

0.5%

-0.3%

 

USD

Initial Jobless Claims 

343K

370K

372K

 

USD

Continuing Jobless Claims 

3198K

3210K

3221K

 

USD

PPI (YoY) 

1.5%

1.8%

2.3%

 

USD

Core PPI (YoY) 

2.2%

2.2%

2.1%

Dec. 14

CNY

Chinese HSBC Manufacturing PMI 

50.90

 

50.50

 

EUR

French Manufacturing PMI 

44.6

45.0

44.5

 

EUR

German Manufacturing PMI 

46.3

47.2

46.8

 

EUR

Manufacturing PMI 

46.3

46.6

46.2

 

EUR

CPI (YoY) 

2.2%

2.2%

2.2%

 

EUR

Employment Change (QoQ) 

-0.2%

0.0%

0.0%

 

EUR

Core CPI (YoY) 

1.4%

1.5%

1.5%

 

USD

Core CPI (MoM) 

0.1%

0.2%

0.2%

 

USD

CPI (MoM) 

-0.3%

-0.2%

0.1%

 

USD

CPI (YoY) 

1.8%

1.9%

2.2%

 

USD

Core CPI (YoY) 

1.9%

2.0%

2.0%

 

USD

Industrial Production (MoM) 

1.1%

0.3%

-0.7%

 

ARS

Argentinian CPI (MoM) 

0.9%

0.7%

0.8%

Historical: From 2010 to Present

Highest: 6.106 on Jan 07, 2010

Average: 3.836 over this period

Lowest: 1.903 on April 19, 2012

 

Economic Events: (GMT)

WEEKLY

 

Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD

Date

Time

Currency

Event

Forecast

Previous

 Dec. 17

13:30

USD

NY Empire State Manufacturing Index 

-1.0

-5.2

 

14:00

USD

TIC Net Long-Term Transactions 

 

3.3B

 Dec. 18

09:30

GBP

CPI (YoY) 

2.6%

2.7%

 

09:30

GBP

PPI Input (MoM) 

-0.1%

0.4%

 

09:30

GBP

CPI (MoM) 

0.2%

0.5%

 

09:30

GBP

PPI Input (YoY) 

-0.5%

0.1%

 

13:30

USD

Current Account 

-103.5B

-117.4B

Dec. 19

09:00

EUR

German Ifo Business Climate Index 

102.0

101.4

 

09:00

EUR

German Current Assessment 

108.0

108.1

 

09:00

EUR

German Business Expectations 

96.3

95.2

 

11:00

GBP

CBI Distributive Trades Survey 

25

33

 

13:30

USD

Building Permits 

0.875M

0.868M

 

13:30

USD

Housing Starts 

0.870M

0.894M

Dec. 20 

09:30

GBP

Retail Sales (MoM) 

0.3%

-0.8%

 

09:30

GBP

Retail Sales (YoY) 

1.5%

0.6%

Dec. 21

07:00

EUR

GfK German Consumer Climate 

5.9

5.9

 

09:30

GBP

Current Account 

-14.0B

-20.8B

 

09:30

GBP

GDP (QoQ) 

1.0%

1.0%

 

09:30

GBP

GDP (YoY) 

-0.1%

-0.1%

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