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Weather Models Shift; November Called 9 Cents Lower

November natural gas is expected to open 9 cents lower Wednesday morning at $3.17 as weather forecasts make an abrupt shift milder. Overnight petroleum markets were mixed.

"Two model cycles in a row shed demand from the national picture, leading to bigger early season heating demand losses and now, at this point, only marginal last-minute southern cooling demand gains," said Commodity Weather Group in its morning report to clients.

"The models are in fairly good agreement this morning on a stronger warm area in the six-10 day from Texas to the Midwest, with just some lingering cooling on the Eastern Seaboard (some cool air wedging risks) as another stormy situation affects the West Coast. The story continues for the 11-15 day, with mostly a Midcontinent warm pattern, but the European makes stronger progress shifting the warmth toward the Eastern Seaboard as well," said Matt Rogers, president of the firm.

Prior to the overnight plunge, Tim Evans of Citi Futures Perspective saw the market as "settl[ing] into a high-level consolidation phase, with some additional light volume book squaring likely ahead of Thursday's DOE storage report for the week ended Oct. 14."

Evans calculates a 72 Bcf build and said, "a refill on that order of magnitude would represent a seasonal step down from the 79 Bcf gain in the prior week and less than the 84 Bcf five-year average." Evans shows the year-on-five-year surplus dwindling from its present 192 Bcf to 155 Bcf by Nov. 4.

In overnight Globex trading November crude oil rose 75 cents to $51.04/bbl and November RBOB gasoline fell fractionally to $1.5046/gal.

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