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January natural gas was set to open about 4 cents higher Monday to around $3.102 as projected heating demand increased in the 15-day outlook over the weekend.
"As expected, weather guidance over the weekend trended a bit colder as we saw gas-weighted degree day (GWDD) forecasts rise," Bespoke Weather Services said in a morning note to clients. "The result is that GWDDs over the next 15 days will very easily be above seasonal averages as weather-driven heating demand will come close to matching what was seen last year for this period too.
"However, past Day 13 we do see confidence in forecasts decrease sizably, as over the weekend modeling guidance began to show parts of the colder pattern break down."
In its morning six- to 10-day outlook MDA Weather Services said, "Below-normal temperatures look to become an ongoing outlook for the Midwest, South and East, with only brief moderation in the mid-period associated with the passage of a clipper system.
"Much belows average the period around the Great Lakes and are seen in the East as well by the end of the period" while the West shows above- and much above-normal temperatures during the period, the firm said.
Looking further out to the 11- to 15-day outlook, "changes are in the colder direction" versus outlooks issued Friday and Sunday. "Much below-normal temperatures are forecast in a large part of the Eastern Half and including near strong belows at times around the Great Lakes. This comes in a pattern regime like that of the six- to 10-day period, with a ridge built northward from the West Coast toward the Arctic and providing a pathway for cold air into the Eastern Half."
From a technical perspective, Brian LaRose, analyst with ICAP Technical Analysis, said following Friday's close that "if the January contract is going to avoid another round of fresh lows, the bulls will need to prevent natural gas from slipping below" $2.970 down to $2.950.
"In the event natural gas is unable to hold above this band, we would be prepared for the slide to continue near-term,” LaRose said. “We see $2.887-$2.884, then $2.800-$2.798-$2.784 as our initial downside targets in this situation."
January crude oil was set to open about 55 cents lower Monday, trading around $57.81/bbl. January RBOB Gasoline was trading about 1.8 cents lower at around $1.7237/gal.