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Weekend Weather Guidance Offers Little for Bulls; March Natural Gas Called Lower

March natural gas was set to open Monday about 5 cents lower at around $2.794, as weather guidance over the weekend failed to offer anything to excite the bulls in terms of prospective heating demand.

“Weekend model guidance was rather unimpressive as we continue to see a pattern set up that will feature occasional cold shots into the center of the country over the next couple of weeks but little that will really get demand elevated far above average,” Bespoke Weather Services said Monday.  “...So far this morning natural gas prices are making a leg lower, which appears warranted given the gas-weighted degree day losses we saw over the weekend.

“Yet overnight guidance ticked a bit more favorable for additional heating demand compared to some trends we saw earlier in the weekend, and given the Madden-Julian oscillation propagation we continue to see more risks that models trend colder over warmer through the week.”

NatGasWeather.com on Sunday said it saw “no major changes” in the weekend data, “with a few days slightly colder, and a few slightly milder ones, but overall seen just very slightly colder.

“But what’s most important, the pattern Feb. 11-17 still has the Arctic cold pool retreating northward into Canada, well out of reach of U.S. weather systems,” the firm said. “This is only after this week brings strong demand as two rather chilly weather systems track across the northern and eastern U.S.

“There’s extremely cold air just barely across the border, so these systems were quite close to being rather impressive, but in the end, they’re playing out cold, but not Arctic cold.”

In its latest six- to 10-day outlook Monday, Radiant Solutions said that “compared to Friday’s expectations, the forecast is colder in the Central U.S. and warmer along the East Coast, with the Southeast also being warmer relative to Sunday’s report.

“Volatility remains a theme within the models, and confidence holds on the lower side of usual as a result,” Radiant said. “The only exception comes in the Southwest where above normal temperatures persists.”

From a technical perspective, analysts with Rafferty Commodities Group noted that last week saw the March contract set a higher high than the week prior before closing lower week/week.

“The range last week also eclipsed the range from the previous week. This key reversal suggests that the bulls had the ball but then fumbled only to see the bears pick it up and get a good run to the downside,” analysts said.

March crude oil was set to open about 38 cents lower at around $65.07/bbl, while March RBOB gasoline was down about 1.5 cents to $1.8572/gal.

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