The bulls are out in full force now that warmer weather forecasts across the US have permeated the markets. Temperatures from the North East to the eastern Midwest are expected to be above normal for the next 6-10 days. Warmer temperatures also stabilize sentiment among speculators in the natural gas market. Warmer temperatures are forecast for large parts of Texas and across stretches of the West Coast from Washington through California. Overall, the mercury levels are higher across much of the US for the coming two week period, and this bodes well for natural gas companies, stocks and futures.

Natural Gas Inventories

Recently released data shows that natural gas storage supplies in the US increased by 32 billion ft³ – 10 billion ft³ lower than the expected figure. The EIA reported that 2.912 trillion ft³ of natural gas storage exists in the US as of early August – 22.5 percentage points more than the same period a year ago. This figure is also 2.2 percentage points higher than the 5-year average for July and August. It's interesting to point out that the next report by the Energy Information Administration (EIA) on August 13 will likely reveal an increase of 57 billion ft³ for the week that ended on Friday, August 7. But temperatures will not be rising uniformly across the US, as cooler temps across the Northwest, Northeast and the Great Lakes region are forecast through August 20, 2015.

The weather forecast certainly translated into higher prices for gas futures for delivery in September. On Monday, 10 August 2015, prices briefly jumped $0.05 to $2.85. It wasn't only the natural gas markets that rose, it was oil markets too. But I still believe that caution is the order of the day with commodities like crude oil, natural gas, iron ore, copper and the like. The fact of the matter is that we have more to contend with than rising temperatures alone. These are some of the issues that should be factored into any trades or investments vis-a-vis natural gas: