November natural gas is expected to open a penny lower Monday morning at $3.18 as traders factor in less than normal heating and cooling loads, and technicians see natural gas as having completed a five-wave advance. Overnight oil markets were mixed.

Observers are expecting cooler temperatures to prompt mild heating load this week. "Some semblance of heating demand will make its first appearance of the fall in eastern markets this week," said industry consultant Genscape in a Monday morning report. "Genscape [metrics] forecast shows national population-weighted temps moving into HDD territory for the first time in earnest this week, about two weeks later than normal.

"The bulk of the cooling will be in the Pacific Northwest (with HDDs forecast to run about 12 HDDs vs a normal of nine HDDs), Midwest, Northeast, and New England. Midwest HDDs will be front-loaded for today through Wednesday, then gradually ease with warming. Genscape's associated demand forecast has regional demand climbing to a peak of 9.54 Bcf/d by Thursday, then waning from there.”

For the week ended Oct. 15 the National Weather Service forecasts below normal heating and cooling loads for major energy markets. New England is expected to see 89 combined DD (degree days) or eight fewer than normal, and the Mid-Atlantic is set to experience 77 DD, or five fewer than its normal tally. The greater Midwest from Ohio to Wisconsin is expected to take on 68 DD, or 19 under its normal quota.

Market technicians see the market needing to clear some significant hurdles if it is to continue rising. "Break out? Or fake out?" queried Brian LaRose, a technician at United ICAP, in Friday closing comments. "The price action to start the week will be critical in answering that question. If a diagonal fifth wave is coming to an end, natgas should not be able to sustain a break above $3.380 intraday, and should by no means get above $3.299 on a closing basis. Exceed these resistance points and there is room up to $3.680, then $3.910."

The National Hurricane Center reported that Hurricane Matthew had moved to 200 miles east of Cape Hatteras, NC, and was no longer being tracked. Activity consisted of Tropical Storm Nicole located several hundred miles south of Bermuda.

In overnight Globex trading November crude oil dropped 47 cents to $50.28/bbl and November RBOB gasoline rose fractionally to $1.4839/gal.