Natural Gas Fundamental Analysis June 4, 2012, Forecast

Analysis and Recommendations:

Natural Gas is trading at 2.337 on par our forecasts in April and our monthly report for May. Speculators were able to push down the price of NG to a 10 year low, and then talked up the markets to push the price to a high of 2.82 until they abandoned the commodity and it fell back to its proper level.

Supplies have remained overall steady, inventory has not changed much and demand has not increased. Simple reports from the EIA saying the energy producers were going to turn to NG for their extra capacity because of its low price, started the markets moving up, compounded with gas producers closing wells and cutting back production because of high inventories and low demand, keeping prices too low. All of this was magnified and amplified to artificially create a market.

Weather forecasts call for a warmer than average spring, but not a hot spring, or an exceptionally hot summer, so there will not or should not be high seasonal demand. NG is not exported at the present time so oversea demands or currency fluctuations do not directly affect the price.

Therefore price should be fairly stable.

FxEmpire 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.


Leave a Reply

Your email address will not be published. Required fields are marked *