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Weather Bears Stirring; November Called 8 Cents Lower

November natural gas is expected to open 8 cents lower Monday morning at $2.92 as overnight weather models called for decreased heating load. Overnight oil markets rose.

"The latest forecast is warmer than Friday's forecast across much of the CONUS [Continental United States], though the East and West Coasts are cooler for Days 11-12," said WSI Corp. in its morning 11- to 15-day report to clients. "Some of these changes are offset by the period shift, and [gas-weighted heating degree days] are -2.4 for Days 11-12 to 51.5 for the whole period, which are still 10.7 less than average.”

WSI offered the caveat that "there is guidance to support risks in either direction. Teleconnections and the GFS guidance offer colder risks and trend to the forecast across the eastern two thirds of the CONUS.”

Traders are trying to wrap their heads around expected winter weather, and early indications point to a cooler than last year winter, but that's not saying much. "Weather continues to trend warmer as we head into the Winter phase, storage builds continue to be beefy, production continues to impress and exports are at full-tilt," said Scott Shelton of ICAP Commodities in a morning note to clients.

"Looking back on 2017, we think we may have written the same line a dozen times across as many weeks this year. We don't think anybody foresaw a weather year like the one that's soon to end. Early views on the coming Winter all mostly point to a cooler-than-last-year scenario, but not hugely cooler. Backloaded? Probably, or at least that's the hope, but we're not holding our collective breath."

In overnight Globex trading November crude oil rose 84 cents to $52.29/bbl and November RBOB gasoline gained 2 cents to $1.6395/gal.

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