Natural Gas Fundamental Analysis – Forecast for the week of September 19, 2016

Natural Gas soared at the end of the week to close at 2.954 as we move into the mid-season, but increased global demand for US natural gas is helping to support prices as new demands will soon outpace production. NG remains a strong buy gaining 5.61% this week and is up 26% on a year to date basis. natural gas market is well on the way to rebalancing as unusually high air-conditioning demand coupled with strong underlying consumption growth absorbs the record inventories left at the end of last winter.

Anticipating a tighter market in 2017, hedge funds and other money managers amassed the largest net long position in natural gas futures and options for more than two years by the end of August. Despite some recent profit-taking and fresh short selling, the hedge funds’ net long position in natural gas futures and options on Sept. 6 remained at the highest since July 2014

Gas futures hit a 2 1/2-month high Thursday after a weekly storage update showed a smaller-than-normal addition to storage for this time of year. That has happened frequently this summer, a big reason for the rally.

A surplus in storage, once about 50% higher than last year’s levels or the five-year average, has narrowed compared to past years. As of Sept. 9, U.S. natural gas stockpiles totaled 3.5 trillion cubic feet, 5.6% above levels from a year ago and 9.3% above the five-year average for the same week, the U.S. Energy Information Administration said Thursday.

Sept 16-22nd: High pressure continues to dominate the southern US with very warm highs of mid-80s to lower 90s. Although, comfortable temperatures of 70s to lower 80s cover much of the rest of the US, lasting through this weekend, including the Great Lakes and northeastern US. Over the west-central US, a weather system continues to tracking through with showers and cooler temperatures, while over the West temperatures are warming back above normal. A swing back warmer is expected over the eastern US next week as high pressure returns to bring stronger nat gas demand. Overall, nat gas demand will be LOW over the northern US and MODERATE to HIGH over the southern US.

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Economic Events: (GMT)

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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