January natural gas is set to open a penny lower Wednesday morning at $1.81 as traders have to swallow yet another near-term weather forecast calling for additional moderation. Overnight oil markets were mixed.
MDA Weather Services in its six- to 10-day outlook said, "The forecast trends warmer yet again today, with strong aboves now expected to be widespread across the eastern half. This includes readings averaging the period around 20 F above normal from the eastern Midwest to the Northeast. Temperatures are expected to peak out ahead of low pressure around mid-period.
"The large scale pattern producing this record warm pattern in the eastern half comes from features associated with the +NAO [North Atlantic Oscillation] along with Pacific flow induced by the strong El Nino. Models show good agreement in this regard, and confidence is high for this lead time.
"The Euro Op model brings additional warm risk to the East late in the period. The West carries warmer risks as well as this has been a bias among guidance in the presence of the Pacific flow."
Analysts see the soft pricing currently in the Marcellus and Utica more widely spread for 2016.
"The price weakness [that] was particularly acute in the Northeast, where the inability of the electric power sector to absorb additional supply forced producers to shoulder much of the accommodation," said Teri Viswanath, director of commodity strategy at BNP Paribas in a report.
"Looking ahead to 2016, it now appears that the sort of price weakness that has been endemic to the Northeast and Appalachian supply basins over the past year will likely spread more uniformly across the country."
BNP revised its price forecast lower and predicts 2016 with Q1 at $1.95, Q2: $2.00, Q3: $2.40 and Q4: $2.70.
In overnight Globex trading January crude oil fell 21 cents to $37.14/bbl and January RBOB gasoline rose 2 cents to $1.2739/gal.