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
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 ended its rollercoaster week at 3.445 hitting a high of 3.507 after opening the week at 3.295 as traders dumped the commodity at the end of the previous week, after warmer weather forecasts dropped residential demand. This week with a weak US dollar and a change in weather patterns gas climbed again.
Date |
Last |
Open |
High |
Low |
Change % |
Dec 21, 2012 |
3.445 |
3.462 |
3.507 |
3.425 |
-0.48% |
Dec 20, 2012 |
3.461 |
3.325 |
3.467 |
3.317 |
4.04% |
Dec 19, 2012 |
3.326 |
3.389 |
3.413 |
3.285 |
-1.89% |
Dec 18, 2012 |
3.390 |
3.356 |
3.450 |
3.337 |
1.03% |
Dec 17, 2012 |
3.356 |
3.295 |
3.394 |
3.277 |
1.88% |
The week inventory report from the EIA showed a larger than expected decrease in volume. Working gas in storage was 3,724 Bcf as of Friday, December 14, 2012, according to EIA estimates. This represents a net decline of 82 Bcf from the previous week. Stocks were 66 Bcf higher than last year at this time and 345 Bcf above the 5-year average of 3,379 Bcf. In the East Region, stocks were 80 Bcf above the 5-year average following net withdrawals of 49 Bcf. Stocks in the Producing Region were 183 Bcf above the 5-year average of 1,078 Bcf after a net withdrawal of 24 Bcf. Stocks in the West Region were 81 Bcf above the 5-year average after a net drawdown of 9 Bcf. At 3,724 Bcf, total working gas is above the 5-year historical range.
I would like to take this time to express my best wishes to all of my readers during this holiday season and extend the best hopes for profitable trading in 2013.
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 17-21 actual v. forecast for Euro, GPB, the Franc, and USD
Date |
Time |
Currency |
Event |
Actual |
Forecast |
Previous |
Dec. 17 |
00:01 |
GBP |
Rightmove House Price Index (MoM) |
-3.3% |
-2.6% |
|
|
13:30 |
USD |
NY Empire State Manufacturing Index |
-8.1 |
-1.0 |
-5.2 |
|
14:00 |
USD |
TIC Net Long-Term Transactions |
1.3B |
25.0B |
3.2B |
Dec. 18 |
09:30 |
GBP |
Core CPI (YoY) |
2.6% |
2.7% |
2.6% |
|
09:30 |
GBP |
CPI (YoY) |
2.7% |
2.6% |
2.7% |
|
09:30 |
GBP |
PPI Input (MoM) |
0.1% |
-0.1% |
0.1% |
|
09:30 |
GBP |
CPI (MoM) |
0.2% |
0.2% |
0.5% |
|
09:30 |
GBP |
PPI Input (YoY) |
-0.3% |
-0.5% |
0.1% |
|
13:30 |
USD |
Current Account |
-107.5B |
-103.4B |
-118.1B |
Dec. 19 |
09:00 |
EUR |
German Ifo Business Climate Index |
102.4 |
102.0 |
101.4 |
|
09:00 |
EUR |
German Current Assessment |
107.1 |
108.0 |
108.1 |
|
09:00 |
EUR |
German Business Expectations |
97.9 |
96.3 |
95.2 |
|
11:00 |
GBP |
CBI Distributive Trades Survey |
19 |
25 |
33 |
|
13:30 |
USD |
Building Permits |
0.899M |
0.875M |
0.868M |
|
13:30 |
USD |
Housing Starts |
0.861M |
0.873M |
0.888M |
Dec. 20 |
09:30 |
GBP |
Retail Sales (MoM) |
0.0% |
0.3% |
-0.7% |
|
09:30 |
GBP |
Retail Sales (YoY) |
0.9% |
1.5% |
0.8% |
|
13:30 |
USD |
Initial Jobless Claims |
361K |
357K |
344K |
|
13:30 |
USD |
GDP (QoQ) |
3.1% |
2.8% |
2.7% |
|
13:30 |
USD |
Continuing Jobless Claims |
3225K |
3199K |
3213K |
|
15:00 |
USD |
Existing Home Sales |
5.04M |
4.87M |
4.76M |
|
15:00 |
USD |
Philadelphia Fed Manufacturing Index |
8.1 |
-3.0 |
-10.7 |
Dec. 21 |
07:00 |
EUR |
GfK German Consumer Climate |
5.6 |
5.9 |
5.8 |
|
09:30 |
GBP |
Business Investment (QoQ) |
3.8% |
3.5% |
3.7% |
|
09:30 |
GBP |
Current Account |
-12.8B |
-14.0B |
-17.4B |
|
09:30 |
GBP |
GDP (QoQ) |
0.9% |
1.0% |
1.0% |
|
09:30 |
GBP |
GDP (YoY) |
0.0% |
-0.1% |
-0.1% |
|
13:30 |
USD |
Core Durable Goods Orders (MoM) |
1.6% |
-0.2% |
1.9% |
|
13:30 |
USD |
Core PCE Price Index (MoM) |
0.0% |
0.1% |
0.1% |
|
13:30 |
USD |
Durable Goods Orders (MoM) |
0.7% |
0.2% |
1.1% |
|
13:30 |
USD |
Personal Spending (MoM) |
0.4% |
0.3% |
-0.1% |
|
14:55 |
USD |
Michigan Consumer Sentiment |
72.9 |
74.7 |
74.5 |
Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD
Date |
Time |
Currency |
Event |
Forecast |
Previous |
Dec. 28 |
07:45 |
EUR |
0.1% |
-0.2% |
|
|
07:45 |
EUR |
0.2% |
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
WEEKLY