Natural Gas Fundamental Analysis

[Samirofi]

January 5, 2016


Natural Gas reversed year end gains to trade at 2.261 falling 76 point as weather remained warm. Investments in gathering and processing natural gas are expected to continue in 2016, even as companies look to pull more drilling rigs and hold off on completing wells. North Dakota is scheduled to have four new gas processing plants come online in 2016, plus additional gathering lines and compressor stations.

Companies that transport and process natural gas have indicated that if the state had 90 or 100 drilling rigs operating, they would be racing to keep up, Helms said. With a lower rig count — 61 last week — companies are able to catch up on a backlog of wells that need pipelines to gather the natural gas.

The latest weather reports from NOAA (National Oceanic and Atmospheric Administration) reported that warmer-than-normal winter weather could be experienced for the next two weeks. El Nino weather is the major cause for the warm winter weather in 2015 and 2016. The warm weather will likely curb the heating demand, and as a result, natural gas prices fell.

Dec 31-Jan 6th: A strong cold blast will push across the central and eastern US the next few days with overnight lows dropping well below freezing, including fairly deep into the southern US. The West, Plains, and northern Texas will see the coldest temperatures with lows into the single digits and teens, locally below 0°F. Temperatures should again warm over the East during the middle of next week as high pressure returns, while the interior West and Plains remain cool and unsettled with rain and snow showers. This will increase nat gas demand from MODERATE to HIGH.

[Samirofi]

Natural Gas Weekly Fundamental Analysis – February 8-12, 2016 -Forecast

Natural Gas was down again this week falling 10.27% to close at 2.062 as warmer temperatures lowered demand while output from EIA dropped. The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stocks decreased by 152 billion cubic feet for the week ending January 22. Analysts were expecting a storage withdrawal of around 170 billion cubic feet. The five-year average for the week is a withdrawal of around 178 billion cubic feet, and last year’s withdrawal for the week totaled 115 billion cubic feet. The withdrawal from storage totaled 211 billion cubic feet in the previous week.

Milder weather in the forecast for the next week or so has chopped about 12% off natural gas prices since last week. Demand is expected to be only moderate through early next week.

Stockpiles are about 20% above their levels of a year ago and about 17.9% above the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.934 trillion cubic feet, around 445 billion cubic feet above the five-year average of 2.489 trillion cubic feet and 490 billion cubic feet above last year’s total for the same period. Working gas in storage totaled 2.444 trillion cubic feet for the same period a year ago.

Feb 3-9th: A winter storm is currently tracking across the Midwest with a swath of snow ending. Ahead of the cold front over the east-central US, severe thunderstorms are expected with isolated tornadoes. Behind the cold front, overnight temperatures will drop into the single digits and teens with subfreezing temperatures pushing deep into the South. The eastern US will gradually begin to cool as the cold front gradually pushes through while fizzling Thursday. Over the weekend, a polar front will graze upper New England with light snow, while a milder weather system brings rain, snow, or ice to TX and across the SE. Finally, a Polar Outbreak will arrive early next week with much colder temperatures. Overall, nat gas demand will be MODERATE-HIGH.

[ashif]

U.S. natural gas prices near 9-month highs

U.S. natural gas futures held near the prior session’s nine-month highs on Tuesday, as forecasts for continued above-normal temperatures across most parts of the U.S. over the next two weeks continued to provide support.Natural gas for delivery in July on the New York Mercantile Exchange tacked on 1.0 cent, or 0.39%, to trade at $2.594 per million British thermal units by 14:35GMT, or 10:35AM ET.A day earlier, natural gas futures rallied to $2.635, the most since September 29, as warmer weather lifted cooling demand prospects for the fuel.Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on early summer cooling demand.

[ashif]

Natural gas futures climb to 9-month highs on warm summer outlook
U.S. natural gas futures rose to a nine-month high on Monday, on forecasts for continued above-normal temperatures across most parts of the U.S. throughout most of summer.The National Weather Service’s most recent three-month outlook showed above-average temperatures for nearly the entire country. It predicts far above-average temperatures for the West, the Northeast and the Southeast.Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on early summer cooling demand.Natural gas for delivery in July on the New York Mercantile Exchange rose to an intraday peak of $2.689 per million British thermal units, the most since September 16. It last stood at $2.687 by 14:25GMT, or 10:25AM ET, up 6.4 cents, or 2.44%. Meanwhile, traders looked ahead to fresh weekly information on U.S. gas inventories to gauge the strength of demand for the fuel.

[ashif]

Natural gas edge lower after bearish weekly storage data
U.S. natural gas declined in North America trade on Thursday, after data showed that natural gas supplies in storage in the U.S. rose more than expected last week.

Natural gas for delivery in July on the New York Mercantile Exchange shed 3.1 cent, or 1.2%, to trade at $2.645 per million British thermal units by 14:32GMT, or 10:32AM ET. Prices were at around $2.681 prior to the release of the supply data.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended June 17 rose by 62 billion cubic feet, above forecasts for an increase of 58 billion.

That compared with builds of 69 billion cubic feet in the prior week, 73 billion a year earlier and a five-year average of 88 billion cubic feet.

Total U.S. natural gas storage stood at 3.103 trillion cubic feet, 19.9% higher than levels at this time a year ago and 21.9% above the five-year average for this time of year.

Unless intense summer heat boosts demand from power plants, stockpiles will test physical storage limits of 4.3 trillion cubic feet at the end of October.

Meanwhile, updated weather forecasting models continued to show above-normal temperatures across most parts of the U.S. over the next two weeks.

[ashif]

Natural gas price jump to 10-month high amid rising temperatures.

U.S. natural gas surged to a ten-month high on Tuesday, as forecasts for continued above-normal temperatures across most parts of the U.S. throughout most of summer raised expectations for power generation demand to meet air conditioning needs.

Updated forecasts released Monday said temperatures may be hotter than normal throughout most of the contiguous U.S. from July 8 through July 12.

Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.

[ashif]

Natural gas down by 6%


U.S. natural gas fell sharply as investors cashed out of the market to lock in gains from a recent rally which took prices to the highest level since May 2015.


Natural gas for delivery in August on the New York Mercantile Exchange tumbled by as much as 6.5% to an intraday low of $2.801 per million British thermal units, its weakest since June 28. It last stood at $2.806 by 14:39GMT, or 10:39AM ET, down 18.1 cents, or 6.06%.


Gas futures jumped to $2.998 on Friday, the highest in more than a year, as hot summer temperatures across most parts of the U.S. raised expectations for power generation demand to meet air conditioning needs.


Last week, natural gas futures soared 35.1 cents, or 12.21%, the sixth straight weekly gain. Prices are up nearly 50% since late May as expectations have grown that hot summer weather will lead to heavy demand.

[ashif]

U.S. natural gas jump amid spreading heatwave.


U.S. natural gas bounced back from the prior session's losses on Tuesday, as investors bet a heat wave making its way across the continental U.S. will prompt households to ramp up their air conditioning.


Updated weather forecasting models showed that temperatures are expected to be warmer than previously projected in the central U.S. from July 20 to July 24, and sweltering conditions are also forecast for the West from July 25 to July 29.


Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.


Natural gas for delivery in August on the New York Mercantile Exchange rose 3.7 cents, or 1.36%, to trade at $2.759 per million British thermal units

[ashif]

U.S. natural gas prices drop


U.S. natural gas declined on Monday, falling for the first time in three sessions as investors locked in gains after prices climbed to a two-week high.


Prices climbed to a daily peak of $2.785 earlier, the most since July 11, as investors bet a heat wave making its way across the continental U.S. will prompt households to ramp up their air conditioning.


Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.


Natural gas storage in the U.S. rose by 34 billion cubic feet last week, according to the U.S. Energy Information Administration, below forecasts for an increase of 39 billion. That compared with an increase of 64 billion cubic feet in the prior week, 59 billion a year earlier and a five-year average of 61 billion cubic feet.


Total U.S. natural gas storage stood at 3.277 trillion cubic feet, 14.4% higher than levels at this time a year ago and 17.1% above the five-year average for this time of year.


Unless intense summer heat boosts demand from power plants, stockpiles will test physical storage limits of 4.3 trillion cubic feet at the end of October.


Natural gas prices are down nearly 10% since reaching a 13-month high on July 1 amid speculation that July heat won’t prevent stockpiles from reaching a record before the winter.

[ashif]

Natural gas futures edge lower


U.S. natural gas futures declined, falling for the first time in three sessions as investors locked in gains after prices climbed to a four-week high on Friday.


Natural gas for delivery in September on the New York Mercantile Exchange shed 4.9 cents, or 1.7%, to trade at $2.827 per million British thermal units.On Friday, prices climbed to $2.911, the most since July 5, as sentiment improved after a government report showed the smallest inventory gain in a decade.


Natural gas storage in the U.S. rose by 17 billion cubic feet last week, according to the U.S. Energy Information Administration, the smallest storage injection for the same period since a withdrawal was reported in 2006.