Natural Gas Fundamental Analysis, May 12, 2015 – Forecast
Analysis and Recommendations:
Natural Gas gained 7 points as temperature across the US turned to summer weather increasing residential demand earlier than expected. The commodity is trading at 2.888. Throughout the winter, the varying temperatures introduce a bit of noise into the supply-demand relationship that sets natural gas prices. Cold can disrupt production and causes demand to spike. As the market moves into a seasonal lull in April and May, a clearer picture of summer fundamentals emerges leading to more reliable data for building projections through the end of the summer. As the chart shows, while there were some supply disruptions over the course of this winter, April has ever so slightly surpassed the peak production levels of 2014. Further, the momentum of strong supply growth throughout last year sets this summer up with an embarrassment of production riches which have been contributing directly to the strong storage injection gains the market has seen in April.
Natural gas may see some profit booking at higher levels after last week sharp rally. Meanwhile, forecasts for warmer weather across the U.S. over the next two weeks lifted near-term demand expectations for the fuel. Updated weather forecasting models called for warmer-than-average weather over much of the Midwest and Northeast, as well as the South, which was likely to boost cooling demand.
AccuWeather US Forecast Outlook:
The combination of a cool front swinging in from the Midwest and moisture from a diminishing Ana will bring an end to the summerlike weather in the Northeast early in the new week.
Minor travel delays are possible in parts of the Northeast Monday and Tuesday, following several days of warm and tranquil weather.
Following a Mother’s Day weekend in which many areas will experience high temperatures in the 80s under strong sunshine, increasing moisture will lead to an uptick in showers and thunderstorms from Sunday afternoon into Tuesday.
Monday will be more active than Tuesday across the mid-Atlantic.
The July-like pattern will deliver AccuWeather RealFeel® Temperatures in the 90s in many cities during the afternoon hours.
At first into Sunday evening, thunderstorms will be very spotty in nature. However, an increasing southerly flow of air ahead of the front will help to draw leftover moisture from Ana northward along the mid-Atlantic coast by Monday.
ForexTraq 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 up to the data analysis and information in our weekly reports.
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)
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