By FXEmpire.com
Natural Gas Weekly Fundamental Analysis April 16-20, 2012, Forecast
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.
Analysis and Recommendation:
Natural Gas reached a new historical low on Friday touching at 1.96 falling below the 10 year low.
|
Date |
Open |
High |
Low |
Change % |
|
|
04/13/2012 |
1.990 |
1.980 |
1.998 |
1.960 |
0.45% |
|
04/12/2012 |
1.980 |
1.980 |
2.046 |
1.972 |
0.03% |
|
04/11/2012 |
1.979 |
2.030 |
2.049 |
1.972 |
-2.49% |
|
04/10/2012 |
2.029 |
2.113 |
2.126 |
2.023 |
-3.98% |
|
04/09/2012 |
2.112 |
2.087 |
2.116 |
2.066 |
1.25% |
The most recent EIA inventory stated:
Summary
Working gas in storage was 2,487 Bcf as of Friday, April 6, 2012, according to EIA estimates. This represents a net increase of 8 Bcf from the previous week. Stocks were 888 Bcf higher than last year at this time and 920 Bcf above the 5-year average of 1,567 Bcf. In the East Region, stocks were 428 Bcf above the 5-year average following net injections of 7 Bcf. Stocks in the Producing Region were 383 Bcf above the 5-year average of 659 Bcf after a net withdrawal of 3 Bcf. Stocks in the West Region were 109 Bcf above the 5-year average after a net addition of 4 Bcf. At 2,487 Bcf, total working gas is above the 5-year historical range.
Historical:
High 5.13 January 2011
Low 1.9595 April 13, 2012
Economic Events: (GMT)
WEEKLY
- This Week in Petroleum
Release Schedule: Wednesday @ 1:00 p.m. EST (schedule) - Gasoline and Diesel Fuel Update
Release Schedule: Monday between 4:00 and 5:00 p.m. EST (schedule) - Weekly Petroleum Status Report
Release Schedule: The wpsrsummary.pdf, overview.pdf, and Tables 1-14 in CSV and XLS formats, are released to the Web site after 10:30 a.m. (Eastern Time) on Wednesday. All other PDF and HTML files are released to the Web site after 1:00 p.m. (Eastern Time) on Wednesday. Appendix D is produced during the winter heating season, which extends from October through March of each year. For some weeks which include holidays, releases are delayed by one day. (schedule) - Heating Oil & Propane Update (October-March)
Heating Oil, Propane Residential and Wholesale Price Data
Release Schedule: Wednesday at 1:00 p.m. EST - Weekly Coal Production
Release Schedule: Thursday by 5:00 p.m. EST - Weekly NYMEX Coal Futures
Release Schedule: Monday by 5:00 p.m. EST - Coal News & Markets
Release Schedule: Monday by 5:00 p.m. EST - 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)
Originally posted here
