Daily GPI / Markets / NGI All News Access

Forecasters Tweak Outlooks; January Called 4 Cents Higher

January natural gas is expected to open 4 cents higher Monday morning at $1.81 as near-term trades factor in a slight cooling. Overnight oil markets fell.

Forecasters are calling for a cool West and moderate East. In its Monday morning report WSI Corp. said, "[Monday's] six-10 day period is several degrees cooler across the Plains and East, yet a few warmer over the West when compared to Friday's forecast. GWHDDs are up +5.8 to 106 for the period. Forecast confidence is considered above average due to excellent agreement between the models throughout the period.

"Temperatures could run a few degrees warmer over the East during the latter half of the period under a re-developing upper-level warm ridge forecast to build in across the Northeast."

GWHDDs may be up for the six- to 10-day period, but near term, the National Weather Service (NWS) forecasts sharply reduced HDDs and heating requirements for the populous East and Midwest. For the week ending Dec. 26, NWS expects New England to see just 147 HDDs, or a whopping 113 below normal, while the Mid-Atlantic should experience only 125 HDDs, or 116 below its seasonal tally. The greater Midwest is expected to have 140 HDD, or a stout 133 below its norm.

Risk managers are cautious and see no reason to enter the market, short or long. Mike DeVooght, president of DEVO Capital, a Colorado-based trading and risk management firm, counsels trading accounts, end-users and producers to stand aside.

"Natural gas closed lower on the week and at new contract lows. Natural gas traded below $1.80, a level not seen since 1999. The weekly storage draw was higher than anticipated, but still disappointing for this time of year. The news remains the same: moderate weather, flat demand and more than adequate supplies continues to pressure the gas market," he said in a weekly report to clients.

In overnight Globex trading January crude oil fell 28 cents to $34.45/bbl and January RBOB gasoline shed 4 cents to $1.2368/gal.

Copyright ©2018 Natural Gas Intelligence - All Rights Reserved.
ISSN © 2577-9877 | ISSN © 1532-1231

Recent Articles by Bill Burson

Comments powered by Disqus