Rule: 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  is down for the week at 2.466. Natural Gas continues to fall, with excess inventory and fewer days of winter. NG should slowly continue to fall throughout the week, possibly find a near bottom at 2.40

Inventories this week eased slightly last week to 2,513 billion cubic feet (Bcf) as of Friday, February 24, according to the U.S. Energy Information Administration's (EIA) Weekly Natural Gas Storage Report (WNGSR). The implied net withdrawal for the week was 82 Bcf, positioning storage volumes 756 Bcf above year-ago levels.

April natural-gas futures which dipped 5.9% on Thursday following a bearish inventories report bucked the trend, gaining 2 cents, or 0.9%, to settle at $2.48 per million British thermal units.

On the week, natural gas lost 7.8%. That was natural gas's worst week since early February

Only Good News from the US:

Existing home sales US existing home sales picked up unexpectedly in January, but the previous figures were downwardly revised. 

Initial jobless claims US initial jobless claims stayed unchanged in the week ending February the 18th, while the consensus was looking for an increase.

University of Michigan consumer confidence The final figure of Michigan consumer confidence for February showed a strong upward, revision from 72.5 to 75.3, while only a minor one was expected.

New home sales After increasing for four consecutive months, US new home sales dropped at the start of 2012. 

Federal Reserve Chairman Bernanke testified before the Senate, this week, the markets found his comments a bit dovish and drew conclusions that any additional QA was off the table for the time being. Although the Chairman warned that the economy was recovering, he stated it was fragile and he was still worried about jobs. Gold soared on his comments.

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Historical:

High      5.13 January 2011

Low       2.29 January 20, 2011

Economic Events: (GMT)

WEEKLY

Natural Gas Pivot Points (Time Frame: 1 Day)

 

Name S3 S2 S1 Pivot R1 R2 R3

Classic
2.3657
2.4053
2.4357
2.4753
2.5057
2.5453
2.5757

Fibonacci
2.4053
2.4321
2.4486
2.4753
2.5021
2.5186
2.5453

Camarilla
2.4468
2.4532
2.4596
2.4753
2.4724
2.4788
2.4853

Woodie's
-
2.4030
2.4310
2.4730
2.5010
2.5430
-

DeMark's
-
-
2.4905
2.4678
2.4205
-
-