Natural Gas Fundamental Analysis, May 8, 2015 – Forecast
Analysis and Recommendations:
Natural Gas added 4 points ahead of this week’s inventory report due in a few hours. The short term weather forecast for warmer weight is helping to support price moves. Government forecasting systems signaled that weather will be above normal temperatures in the Midwest and northeastern US next week. Cities like New York and Chicago will experience warmer weather, according to Accuweather sources. The warm weather will increase the need for cooling. This will increase the demand for electric power. In turn, the demand for natural gas will increase in the short term.
On April 30, 2015, the EIA (U.S. Energy Information Administration) reported that weekly gas in storage increased by 81 Bcf (billion cubic feet)—compared to the market consensus of 86 Bcf. The lower-than-expected natural gas inventory data also supported gas prices last week. The next EIA report is expected to release on Thursday, May 7.
Gas prices increased for the sixth day over the last ten trading sessions. Prices increased by 1.29% more on the average up days than on the average down days, during the same period.
The European Commission looks forward to the lifting of the US ban on the export of natural gas to the EU member states, Vice-President for Energy Union Sefcovic said this week. The TTIP is a proposed trade and investment agreement between the United States and the European Union.
The US oil and gas companies currently require a special license issued by Washington to supply natural gas abroad. Meanwhile, natural gas licenses are granted automatically for nations with free trade agreements.
AccuWeather US Forecast Outlook:
Following a dip in temperature during the middle of the week, summerlike warmth will rebound across much of the Northeast by this weekend.
Clouds with showers and thunderstorms will take the edge off the warmth that surged in to start the week. The moisture is associated with a cool front that will stall and erode at midweek, resulting in only spotty rainfall.
However, Mother Nature will be turning up the thermostat a bit more starting late this week.
High pressure will build at most levels of the atmosphere late this week and into the weekend. The high will keep a budding tropical system at bay along the southern Atlantic coast. According to Meteorologist Ben Noll, “This will be a summer weather regime in much of the Northeast this weekend with temperatures 10-20 degrees above average for this time of the year.”
People will be able to ditch umbrellas and break out the sunglasses, shorts and short sleeves just like they did this past weekend and early this week.
Only northern New England will miss out on the warmth, relative to the rest of the region, due to more persistent clouds and spotty showers.
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)