Natural Gas Monthly Fundamental Forecast May 2015

natural gas monthly bnsnlaOutlook and Recommendation

Natural Gas suffered a big hit on the last trading day of the month after the release of the weekly EIA inventory. Natural Gas closed at 2.72 climbing from a bottom of 2.49 earlier in the month.  The use of natural gas for power generation (power burn) in April in the Pacific Northwest, which includes Oregon, Washington, and Idaho, is now triple the power burn for the same period in 2014. Power burn reported during the first four weeks of April (1-28) averaged 477 million cubic feet per day (MMcf/d), a 319 MMcf/d year-on-year gain, as reported by Bentek Energy. April 2015 power burn is up by 22% over March levels, whereas power burn in the region typically falls off in April.

Working natural gas in storage increased to 1,710 billion cubic feet as of Friday, April 24, according to the U.S. Energy Information Administration Weekly Natural Gas Storage Report . A net injection into storage of 81 Bcf for the week resulted in storage levels 76.5% above year-ago levels and 4.2% below the five-year average for this week.

The total rig count for April 24 fell by 22 units to 932 rigs, according to data reported by Baker Hughes Inc. Oil rigs fell by 31 units to 703; gas rigs increased by 8 to 225. This is the 20th consecutive week of double-digit declines in the oil rig count, but a potential turnaround for gas-directed drilling. forecast

This summer, warmth and dryness will build in the West, worsening the historical drought conditions that have plagued California for four straight years. Meanwhile, the Gulf Coast will have an abundance of moisture, raising concerns for flooding at times.

In the nation’s midsection, severe weather is forecast to continue into summer, with the overall tornado count increasing from last year. In the Northeast, above-normal temperatures will mark a noticeable difference from the cooler-than-average summer of 2014.

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

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