November natural gas is set to open 3 cents lower Monday morning at $3.26 as forecasters can come up with no near-term seasonal cold to spur demand. Overnight oil markets rose.
Forecasters are having a hard time as their weather models are not in agreement. In the bigger picture there seems to be nothing in the data that suggests the incursion of weather events that would lead to seasonal heating demand. "Back on Friday, the models were in great agreement on a strong warm six-10 day range (which is now the one- to five-day), but in poor agreement for the 11-15 day," said Matt Rogers, president of Commodity Weather Group, in a Monday morning report to clients.
"Now that poor agreement has shifted forward into the six-10 day too, lowering confidence for that period. The American ensemble features seasonal to below normal temperatures for the Eastern U.S., and the European has warmer anomalies (warm side of zero normal line) all the way to the East Coast with the exception of the Northeast. There is at least some agreement on a warm Texas to Southwest and SoCal, which is generating some last-minute enhanced cooling demand concerns."
Data from the National Weather Service (NWS) shows for the week ending Oct. 22, little in the way of heating or cooling load for major eastern energy markets. New England is expected to have 44 total degree days, (DD), or 69 fewer than normal. The Mid-Atlantic, including New York, New Jersey and Pennsylvania, is forecast to see just 38 DD, or 60 fewer than its seasonal tally. The greater Midwest from Ohio to Wisconsin is predicted to experience 66 DD, or 39 less than its seasonal norm.
Mild conditions may be the rule in the Lower 48, but it's a different story in Canada. "Since the first of the month, the weather in Calgary, AB, has been well below normal for this time of year," said EnergyGPS in a Monday morning note to clients. "In fact, we have seen over half the days this month recording double-digit below normal average temperatures.
"This type of deviation from normal in Calgary and other parts of Alberta has impacted the demand in the region as we have seen last week average around 4.7 Bcf. This is roughly 0.7 Bcf higher than last year's October average and just over 0.5 Bcf from last month's average.
"From a price perspective, the increased demand has helped keep AECO pricing strong to where it is trading within a couple of pennies of Empress and actually clearing in the $2.30 level the last week or so."
In overnight Globex trading November crude oil rose 11 cents to $50.46/bbl and November RBOB gasoline gained a penny to $1.5038/gal.