Natural Gas Weekly Fundamental Analysis, November 23 – November 27, 2015 Forecast

Weekly Analysis and Recommendation:  January Natural Gas futures gapped higher to start the week on weather concerns, but by the end of the week was sitting at a new multi-year low. The market finished the week down $0.2570, or 10.10% at $2.2870.

This week’s U.S. Energy Information Administration’s inventory report for the week-ending November 13 showed an increase in natural gas storage by 15 billion cubic feet. This was below trader expectation of around 23 billion cubic feet put pushed natural gas storage levels to a record 4 trillion cubic feet.

This week’s inventory injection was the 33^rd successive weekly injection. It was more than both last year’s build of 11.2 Bcf and the 5-year average addition of 5.5 Bcf for the reported week.

The current storage level at 4.000 trillion cubic feet (Tcf) is up 404 Bcf (11.2%) from last year and 207 Bcf (5.5%) above the five-year average. The reported addition means that natural gas inventories are now in record territory, passing the previous highest level of 3.985 Tcf set last week.

In the absence of major production cuts and a long, lingering cold weather system, we don’t see much upside potential in gas prices over the near-term. There may be periodic short-covering rallies, however, conditions could worsen if the soft heating demand continues.

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:

Forecasts of higher-than-average temperatures across certain regions of the U.S. over the short-term are likely to put a cap on any extensive rallies. Snow and cold weather are expected to blanket the Midwest and upper Midwest over the weekend, but conditions are expected to improve throughout the week. 

An expanding area of snow, rain, wind and cold will hamper Thanksgiving travel in the West, while most areas east of the Rockies can expect no major weather-related problems during the early to middle part of next week. 

Nothing in the forecast suggests a long, lingering cold spell so natural gas demand is not expected to increase significantly. The majority of people traveling over the eastern two-thirds of the nation should not have to contend with snow and ice on their ventures. 

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)