December natural gas was set to open about 2 cents lower Wednesday at around $2.996 as more warming showed up overnight in the medium-range forecast.
Meanwhile, the market could get some bullish news Wednesday, as predictions for the Energy Information Administration's (EIA) storage inventory report -- arriving a day early at noon EST -- indicate another withdrawal is on tap.
In its latest six- to 10-day outlook, MDA Weather Services said the forecast "features a larger warm change in this period, with these adjustments being largest from the Midwest to the East. This comes in what is expected to remain a progressive pattern, but with rounds of high pressure lacking colder source regions.
"The result is a period which averages above normal from the West to the Midwest and including much-aboves in parts of the Southwest and Rockies. Farther east, a variable regime has temperatures being near normal overall, but with early period belows being replaced by aboves in the mid-period.” The European models “remain warmer in the East.”
Bespoke Weather Services said in a morning note to clients that it counted "significant” gas-weighted degree day (GWDD) losses overnight, "to the tune of nine GWDDs” from the Tuesday afternoon forecast. Most of these losses were in the medium-term, where confidence in a temporary ridge across the East popping has increased across all guidance, and we now see warmth being more sustained than previously expected through this period."
Bespoke still sees some bullish risks looking ahead to the second week of December. But with the overnight forecast "bearish enough to pull prices into support at $2.98" unless the the EIA data "surprises bullish, we could be headed for a short-term move even lower to around the $2.92 support level."
A Reuters survey of 23 traders and analysts showed the market expecting EIA to report on average a 51 Bcf withdrawal for the week ended Nov. 17, which would follow the 18 Bcf withdrawal reported the previous week. Responses to the survey ranged from -63 Bcf to -22 Bcf. Last year, 2 Bcf was injected, and the five-year average stands at -26 Bcf.
Stephen Smith Energy Associates is calling for a withdrawal of 48 Bcf. ION Energy’s Kyle Cooper is calling for a 51 Bcf withdrawal, while PointLogic Energy is forecasting a net 54 Bcf decline in inventories.
January crude oil gained in overnight trading, adding about $1 to around $57.81/bbl. December RBOB Gasoline gained fractionally to $1.7733/gal.