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Natural Gas Fundamental Analysis, May 7, 2015 – Forecast

natural gas wednesday bnsnlaAnalysis and Recommendations:

Natural Gas is in the green at 2.787 holding near its recent highs as the temperature patterns are showing warmer weather which might spark some residential demand for air conditioning use.  The natural gas contract closed late last week near 2.91, marking its highest settlement since Mar. 24. In addition, MDA Weather Services has forecast warmer-than-normal temperatures across the US for the first 2 weeks of May. Warmer temperatures mean more cooling demand, increasing demand for gas-fired electricity.

The United States is on the verge of exporting its first major shipment of liquefied natural gas later this year or in early 2016, despite being a net importer of gas. That’s because it’s more profitable to sell gas offshore to foreign countries that need it than to sell domestically.

So, perversely, we can buy cheap natural gas from places like Canada, while at the same time exporting the same thing at higher prices, in liquefied form, since we have the ability to do so via ocean-going tankers.

The future exports of natural gas, combined with the growing adoption of natural gas power from sources like power plants, consumers, and vehicles will continue to eat into supplies.

Lower prices will begin to force some players back out of the business or to change their focus to more liquids, as was the case with Chesapeake Energy (CHK).

AccuWeather US Forecast Outlook:

Wind, seas and surf will build in advance of what could eventually become the first tropical system of 2015 along the southeastern Atlantic coast of the United States this week.

A lingering area of showers and thunderstorms east of Florida is forecast to slowly develop tropical traits. The system has a chance to become the first depression or named tropical system of the 2015 Atlantic hurricane season, even though it may not be fully tropical but rather a subtropical storm. The first name on the list of 2015 storms is Ana.

A subtropical or hybrid storm has some warm, tropical features and some cool, non-tropical features.

“Regardless of tropical development or not, winds and seas will gradually build along the coast from northeastern Florida to southeastern Virginia, well ahead of the center of the system late in the week and into the weekend,” Kottlowski said.

Rough surf was already leading to strong rip currents along southeastern Florida beaches. These conditions will continue at midweek, but will shift northward later in the week.

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.  

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)

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