November natural gas is set to open 2 cents lower Wednesday morning at $2.94 as cooling and heating load are still predicted to be well below normal. Overnight oil markets rose.
Forecasters are seeing a somewhat cooler East but continued warmth in the Southeast.
"[A] cool, fall-like weather system continues sweeping across the north-central U.S. to drive light early season heating demand, while the southern U.S. remains warm with highs in the 80s to near 90F to drive light cooling demand," said Natgasweather.com in a noon update Tuesday.
"The west-central U.S. weather system will bring cooler temperatures into the East this weekend, although the weather data has backed off slightly on the extent of it, reducing the number of CDD's a touch. This will still bring an increase in heating demand to slightly above normal levels before easing again late next week as high pressure returns. Additional fall-like weather systems with cooling are expected into the far western and eastern U.S. in mid-October, but certainly not cold or widespread."
Bottom line, near term both heating and cooling load is expected to be well below normal. The National Weather Service for the week ending Oct. 8 forecast that New England would see a combined total of heating degree days (HDD) and cooling degree days (CDD) of 53, or 27 below normal. The Mid-Atlantic was anticipated to have a combined load of 29 degree days, or 38 fewer than its normal seasonal tally, and the greater Midwest from Ohio to Wisconsin was forecast to see a total of 35 degree days, or 37 under its normal tally.
Tim Evans of Citi Futures Perspective is standing aside the market for now, awaiting a low-risk entry point, but he sees constructive forces in play as estimates of Thursday's storage report are coming in at about 65 Bcf, well below last year's 97 Bcf and a five-year average of 95 Bcf. "Our own model predicts a somewhat smaller 62 Bcf gain, but we'd say that is well within the normal margin of error."
At 8 a.m. EDT the National Hurricane Center (NHC) reported that still-dangerous Hurricane Matthew was 115 miles south of Long Island, Bahamas and moving to the north-northwest at 10 mph. Maximum sustained winds were pegged at 115 mph, and NHC projected Matthew would rip through the Bahamas before hitting the east coast of Florida, Georgia and the Carolinas.
In overnight Globex trading November crude oil gained 95 cents to $49.64/bbl and November RBOB gasoline rose a penny to $1.5088/gal.