Natural Gas Monthly Fundamental Forecast June 2012

Outlook and Recommendation

Natural Gas closed the month at 2.383 after investors talked the commodity up to 2.82 and then sold off for profits.

The natural gas futures market trended lower over the report week. At the New York Mercantile Exchange (NYMEX), the June 2012 natural gas contract declined steadily, losing 30.8 cents per million British thermal units (MMBtu) to settle at $2.429 per MMBtu, prior to its expiration at the close of trading on Tuesday. The July 2012 natural gas contract (which moved into the near-month position yesterday), also declined steadily, ending the week down 37.8 cents per MMBtu to close at $2.388 per MMBtu yesterday.

Working gas in storage was 2,877 Bcf as of Friday, June 1, 2012, according to EIA estimates. This represents a net increase of 62 Bcf from the previous week. Stocks were 713 Bcf higher than last year at this time and 687 Bcf above the 5-year average of 2,190 Bcf. In the East Region, stocks were 347 Bcf above the 5-year average following net injections of 38 Bcf. Stocks in the Producing Region were 249 Bcf above the 5-year average of 842 Bcf after a net injection of 11 Bcf. Stocks in the West Region were 91 Bcf above the 5-year average after a net addition of 13 Bcf. At 2,877 Bcf, total working gas is above the 5-year historical range.

The natural gas rotary rig count, as reported by Baker Hughes Incorporated on May 25, declined by 6 to 594 active units. Meanwhile, oil-directed rigs increased by 1 to 1,383 units.

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.

Historical:

Highest: 6.106 on Jan 07, 2010

Average: 3.989 over this period

Lowest: 1.903 on April 19, 2012