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 was trading just 10 days ago in the range of 3.08-3.20 as traders talked up the commodity and then dumped it. While the US was witnessing unseasonably high temperatures and excess electrical capacity turned to gas for their extra production, the demand for gas increased, but not to the extent that speculators talked up the prices too.

As August begin these speculators sold NG taking profits, but due to the high temperatures, the storms in the gulf region and higher demands from Japan, the price turned back up and held close to the 3.00 range. Until inventory reports from the EIA this week showed an increase in supply, that the additional demand in due to higher temperatures did not use up current production.

Also the weather turned moderate and gas tumbled. It is now trading at 2.784 falling almost 5% on Friday after the inventory release.

Date

Last

Open

High

Low

Change %

Aug 10, 2012

2.784

2.921

2.942

2.760

-4.74%

Aug 09, 2012

2.922

2.925

3.119

2.877

-0.05%

Aug 08, 2012

2.924

2.955

2.986

2.900

-1.08%

Aug 07, 2012

2.955

2.914

2.994

2.882

1.39%

Aug 06, 2012

2.915

2.818

2.936

2.801

3.44%

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 Aug 6-10 actual v. forecast for Euro, GPB, the Franc, and USD

Date

Currency

Event

Actual

Forecast

Previous

Aug 6

GBP

Halifax HPI m/m

-0.6%

-0.5%

0.8%

EUR

Sentix Investor Confidence

-30.3

-30.8

-29.6

GBP

BRC Retail Sales Monitor y/y

0.1%

1.4%

Aug 7

CHF

Foreign Currency Reserves

406.5B

365.1B

CHF

CPI m/m

-0.5%

-0.5%

-0.3%

EUR

Italian Industrial Production m/m

-1.4%

-1.0%

1.0%

GBP

Manufacturing Production m/m

-2.9%

-4.0%

1.2%

EUR

Italian Prelim GDP q/q

-0.7%

-0.7%

-0.8%

EUR

German Factory Orders m/m

-1.7%

-0.9%

0.7%

GBP

NIESR GDP Estimate

-0.2%

-0.7%

Aug 8

CHF

SECO Consumer Climate

-17

-4

-8

EUR

German 10-y Bond Auction

1.42|1.8

1.31|1.5

EUR

German Industrial Production m/m

-0.9%

-0.8%

1.7%

USD

Prelim Nonfarm Productivity q/q

1.6%

1.5%

-0.9%

USD

Prelim Unit Labor Costs q/q

1.7%

0.5%

1.3%

USD

Crude Oil Inventories

-3.7M

-0.6M

-6.5M

USD

10-y Bond Auction

1.68|2.5

1.46|3.6

Aug 9

GBP

Trade Balance

-10.1B

-8.5B

-8.4B

USD

Trade Balance

-42.9B

-47.4B

-48.0B

USD

Unemployment Claims

361K

371K

367K

USD

Mortgage Delinquencies

7.58%

7.40%

Aug 10

EUR

French Industrial Production m/m

0.0%

0.4%

-2.1%

GBP

PPI Input m/m

1.3%

1.4%

-2.9%

USD

Import Prices m/m

-0.6%

0.1%

-2.4%

USD

Federal Budget Balance

-69.6B

-103.0B

-59.7B

Historical: From 2010 to Present

Highest: 6.106 on Jan 07, 2010

Average: 3.836 over this period

Lowest: 1.903 on April 19, 2012

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

Aug 14

5:30

EUR

French Prelim GDP q/q

0.0%

6:00

EUR

German Prelim GDP q/q

0.5%

9:00

EUR

ZEW Economic Sentiment

-22.3

12:30

USD

Core Retail Sales m/m

-0.4%

12:30

USD

PPI m/m

0.1%

12:30

USD

Retail Sales m/m

-0.5%

14:00

USD

Business Inventories m/m

0.3%

Aug 15

12:30

USD

Core CPI m/m

0.2%

12:30

USD

Empire State Manufacturing Index

7.4

13:15

USD

Industrial Production m/m

0.4%

14:30

USD

Crude Oil Inventories

-3.7M

Aug6

9:00

CHF

ZEW Economic Expectations

-42.5

9:00

EUR

CPI y/y

2.4%

12:30

USD

Building Permits

0.76M

12:30

USD

Unemployment Claims

361K

12:30

USD

Housing Starts

0.76M

14:00

USD

Philly Fed Manufacturing Index

-12.9

Aug 17

6:00

EUR

German PPI m/m

-0.4%

8:00

EUR

Current Account

10.9B

13:55

USD

Prelim UoM Consumer Sentiment

72.3

Click here a current Natural Gas Chart.