Natural Gas Weekly Fundamental Analysis December 31, 2012 – January 4, 2013, Forecast

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Updated: Aug 21, 2015, 02:00 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 31, 2012 – January 4, 2013, 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 was the big gainer at the end of the week, opening on Monday at 3.466 to close almost flat at 3.465. Midweek gas fell to trade at 3.328 after holiday weather forecast showed unseasonably warmer temperatures. These caused in a decline in residential use, but as the old saying goes, never trust the weatherman. By the end of the week the south and the east were blanketed by snow and freezing temperatures as a major storm moved up from the gulf killing as many as 16 people.

Date	Last	Open	High	Low	Change %
Dec 28, 2012	3.465	3.420	3.486	3.361	1.32%
Dec 27, 2012	3.420	3.400	3.429	3.357	0.60%
Dec 26, 2012	3.399	3.337	3.438	3.333	1.86%
Dec 25, 2012	3.337	3.335	3.340	3.328	-0.96%
Dec 24, 2012	3.369	3.466	3.469	3.364	-2.80%

As temperatures across the US declined the price of gas climbed. Due to the holiday week the EIA inventory was delayed until Friday. The weekly inventory reported that U.S. natural gas storage fell by 72 billion cubic feet last week to 3.652 trillion cubic feet, less than a decline of 82 billion cubic feet in the preceding week. Analysts had expected U.S. natural gas storage to fall 76 billion cubic feet last week, though markets focused more on weather forecasts

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 24 -28 actual v. forecast for Euro, GPB, the Franc, and USD

Date	Currency	Event	Actual	Forecast	Previous
Dec. 27	GBP	BBA Mortgage Approvals	33.6K	34.6K	33.1K
	USD	Initial Jobless Claims	350K	360K	362K
	USD	Continuing Jobless Claims	3206K	3200K	3238K
	USD	CB Consumer Confidence	65.1	70.0	71.5
	USD	New Home Sales	377K	378K	361K
Dec. 28	EUR	French Consumer Spending (MoM)	0.2%	0.1%	-0.1%
	EUR	French GDP (QoQ)	0.1%	0.2%	0.2%
	EUR	Italian 10-Year BTP Auction	4.48%		4.45%
	USD	Chicago PMI	51.6	51.0	50.4
	USD	Pending Home Sales (MoM)	1.7%	1.0%	5.0%

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

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)

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

Date	Time	Currency	Event	Forecast	Previous
Jan. 01	01:00	CNY	Chinese Manufacturing PMI	51.00	50.60
Jan. 02	00:00	EUR	German CPI (MoM)	0.7%	-0.1%
	00:00	EUR	German CPI (YoY)	1.9%	1.9%
	08:00	CHF	KOF Leading Indicators	1.38	1.50
	15:00	USD	ISM Manufacturing Index	50.2	49.5
Jan. 03	08:00	CHF	KOF Leading Indicators	1.35	1.50
	08:30	CHF	SVME PMI	48.5	48.5
	08:55	EUR	German Unemployment Change	10K	5K