November natural gas is set to open 8 cents lower Friday morning at $2.81 as overnight weather data resulted in a large decrease in forecast heating load. Overnight oil markets fell.
"[Friday's] six-to-10 day period forecast is notably warmer than yesterday's forecast over the eastern two thirds of the” continental United States, “aided by the day shift. The Northwest and No. Rockies are colder," said WSI Corp. in its morning report to clients. Continental United States gas-weighted heating degree days “are -9.3 to 61.1, which are now 12.2 below average.
"Even with the warmer changes, there is a warmer risk across the south-central and eastern U.S., especially day six across the south-central states. The Northwest, No. Rockies and western Canada could run even colder."
Traders eyeing the long side of the market are keeping their powder dry for now. "This market has been drafting lower following a strong start to this week as consensus of short term temperature forecasts has shifted in a more bearish direction almost daily," said Jim Ritterbusch of Ritterbusch and Associates in a morning note to clients. "Latest feature within the outlooks has been some expected mild trends along the heavily populated eastern seaboard. These views have overridden the significance of this fall's newly developed supply deficit that widened to 46 bcf per yesterday's” Energy Information Administration data.
"And while some additional widening in the supply shortfall would appear to lie ahead during the next couple of weeks, an adequate supply of more than 3.8 Tcf with which to begin the withdrawal cycle at about the middle of next month is keeping buyers at bay for now. So, while we don't expect much downside follow through from current levels, we will defer on a buy recommendation pending weekend updates to the six-to-14 day temperature forecasts."
In overnight Globex trading the December crude oil contract fell 28 cents to $52.36/bbl and December RBOB gasoline fell a penny to $1.6888/gal.