February natural gas was set to open Monday about 14 cents lower at around $3.360 as weekend weather guidance moderated on Arctic cold in the medium-term outlook.
The March contract, set to take over as the prompt-month this week, was down about 12 cents at around $3.060.
Bespoke Weather Services said warmer weekend changes to guidance through the first 10 days of February could be easing the market’s concerns about lean storage inventories.
“Weather guidance over the weekend eased much of the medium-term cold risk, as we had been concerned about last week,” Bespoke said. “Warming trends were focused primarily across the first 10 days of February, with guidance backing off cold around Feb. 7-9 before another cold shot looks likely.”
Bespoke said the market could be “overly long and that decreasing withdrawal estimates for the week ending Feb. 9 could ease storage concerns enough to keep the market from rallying as much on long-range cold, especially into expiry Monday. That said, we did add a decent amount of heating demand back overnight, and that should stabilize prices after this gap.”
Radiant Solutions in its six- to 10-day outlook Monday said “a stronger northern Pacific jet stream and some undercutting through ridging near Alaska” resulted in warmer trends for the period versus “both Friday and Sunday.
“...The Eastern Half favors a colder leaning period, including much belows on average in the Upper Midwest,” Radiant said. “Cross polar flow and a polar vortex feature near the Hudson Bay remain factors within this timeframe, suggesting colder air masses coming out of Canada should deliver rounds of much belows into the Midwest.”
NatGasWeather.com also noted warmer changes Feb. 7-9. “The first Arctic shot is faster into the East by a day, but also arriving with less extreme Arctic air and also not pushing it as deep into North Texas and the South, thus a little less impressive.
“A faster arriving break” arriving next Sunday “will be followed by a quick Arctic cold shot across the far northern U.S. Feb. 6-7...The European model retreats the cold pool north Feb. 7-9, leaving mild conditions over the rest of the country.
“There’s potential cold pushes more aggressively into the Midwest and East Feb. 10-13, but with more to prove. If prices were to open lower, it’s likely due to the pattern not looking as cold as the markets were led to believe Feb. 4-9.”
March crude oil was set to open Monday about 44 cents lower at around $65.70/bbl, while February RBOB Gasoline was down fractionally at around $1.9341/gal.