By FXEmpire.com
Introduction: Natural gas is nevertheless a major commodity in its own right, which is used for everything from cooking food to heating houses during the winter. Natural Gas is growing much faster than either of its non-renewable fossil fuel competitors, oil and coal.
Do not miss the weekly U.S. gas inventories report. The figures are issued by the Energy Information Administration (EIA) every Thursday afternoon at 15:30 (released Friday at 15:30 if there was a U.S. bank holiday on Monday). Here’s a link to the latest EIA report. The main natural gas moving figure in there is the change in inventories from the previous week. When it comes to the gas inventories report, we’re talking about billions of cubic feet, Bcf for short.
When the actual change in inventories number is released, it is the deviation from the expected number that is really important. If the actual inventories figure shows a 24 Bcf rise when an 84 Bcf increase was expected, then that is actually positive for the price of natural gas. All else equal, the price of natural gas should rise after the release.
A barrel of oil has roughly 6 times the energy content of natural gas. If the fuels were perfect substitutes, oil prices would tend to be about 6 times natural gas prices. However, due to various market characteristics discussed briefly above and the ease of using oil, the price of oil has been following a pattern of 8-12 times that of natural gas. However that ratio has spiked dramatically since March 2009.
Weekly Analysis and Recommendation:
Natural Gas continues to keep speculators happy, surging to 2.639 as it bounced around like a yoyo all week, allowing speculators to make huge profits on its high volatility.
Prices spiked dramatically off the lows from earlier this month amid forecasts of simmering summer temperatures across the United States and a gradual, but consistent reduction in the storage surplus.
Price action in natural gas has been in-line with our expectations, which call for range-bound fluctuations between $2/mmbtu and $2.75. Given that prices are near the top end of that range currently, we would be more inclined to sell rather than buy.
Even so, the fundamentals for gas are still moving in the right direction to rebalance the market. This week, the EIA confirmed that storage levels continue to increase at a slower-than-normal rate. Operators injected 62 billion cubic feet into inventories last week, below the 98 Bcf of last year and the 89 Bcf five-year average. The inventory surplus remains substantial and prices will need to stay low to encourage demand, while discouraging supply.
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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.
Major Economic Events for the week of June 19-23, 2012 actual v. forecast
|
Date |
Time |
Currency |
Importance |
Event |
Actual |
Forecast |
Previous |
|
Jun. 19 |
02:30 |
AUD |
Monetary Policy Meeting Minutes |
||||
|
10:00 |
EUR |
German ZEW Economic Sentiment |
-16.9 |
4.0 |
10.8 |
||
|
Jun. 20 |
09:30 |
GBP |
Claimant Count Change |
8.1K |
-3.0K |
-12.8K |
|
|
17:30 |
USD |
Interest Rate Decision |
0.25% |
0.25% |
0.25% |
||
|
19:15 |
USD |
Fed Chairman Bernanke Speaks |
|||||
|
23:45 |
NZD |
GDP (QoQ) |
1.1% |
0.5% |
0.4% |
||
|
Jun. 21 |
09:30 |
GBP |
Retail Sales (MoM) |
1.4% |
1.2% |
-2.4% |
|
|
13:30 |
Core Retail Sales (MoM) |
-0.3% |
0.2% |
0.3% |
|||
|
13:30 |
USD |
Initial Jobless Claims |
387K |
380K |
389K |
||
|
15:00 |
USD |
Existing Home Sales |
4.55M |
4.57M |
4.62M |
||
|
Jun. 22 |
09:00 |
EUR |
German Ifo Business Climate Index |
105.3 |
105.9 |
106.9 |
|
|
13:30 |
CAD |
Core CPI (MoM) |
0.2% |
0.3% |
0.4% |
Historical:
Highest: 6.106 on Jan 07, 2010
Average: 3.989 over this period
Lowest: 1.903 on April 19, 2012
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)
Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD
|
Date |
Time |
Currency |
Event |
Previous |
|
Jun 25 |
6:00 |
EUR |
GfK German Consumer Climate |
5.7 |
|
25th-30th |
GBP |
Nationwide HPI m/m |
0.3% |
|
|
14:00 |
USD |
New Home Sales |
343K |
|
|
Jun 26 |
8:30 |
GBP |
Public Sector Net Borrowing |
-18.8B |
|
13:00 |
USD |
S&P/CS Composite-20 HPI y/y |
-2.6% |
|
|
14:00 |
USD |
CB Consumer Confidence |
64.9 |
|
|
Jun 27 |
All Day |
EUR |
German Prelim CPI m/m |
-0.2% |
|
8:30 |
GBP |
BBA Mortgage Approvals |
32.4K |
|
|
10:00 |
GBP |
CBI Realized Sales |
21 |
|
|
12:30 |
USD |
Durable Goods Orders m/m |
0.2% |
|
|
14:00 |
USD |
Pending Home Sales m/m |
-5.5% |
|
|
14:30 |
USD |
Crude Oil Inventories |
||
|
Jun 28 |
7:55 |
EUR |
German Unemployment Change |
0K |
|
8:30 |
GBP |
Current Account |
-8.5B |
|
|
8:30 |
GBP |
BOE Credit Conditions Survey |
||
|
8:30 |
GBP |
Final GDP q/q |
-0.3% |
|
|
12:30 |
USD |
Unemployment Claims |
||
|
12:30 |
USD |
Final GDP q/q |
1.9% |
|
|
23:01 |
GBP |
GfK Consumer Confidence |
-29 |
|
|
Jun 29 |
29th-4th |
EUR |
German Retail Sales m/m |
0.6% |
|
6:45 |
EUR |
French Consumer Spending m/m |
0.6% |
|
|
7:00 |
CHF |
KOF Economic Barometer |
0.81 |
|
|
8:00 |
EUR |
M3 Money Supply y/y |
2.5% |
|
|
9:00 |
EUR |
CPI Flash Estimate y/y |
2.4% |
|
|
12:30 |
USD |
Core PCE Price Index m/m |
0.1% |
|
|
12:30 |
USD |
Personal Spending m/m |
0.3% |
|
|
13:45 |
USD |
Chicago PMI |
52.7 |
|
|
13:55 |
USD |
Revised UoM Consumer Sentiment |
74.1 |
Click here a current Natural Gas Chart.
Originally posted here
