May natural gas was set to open Monday about 2.2 cents higher at around $2.758 as forecasters pointed to near-term colder trends for the eastern part of the country in the weekend weather data.
The May contract headed into the weekend on a bullish note, adding 4.9 cents in Friday’s trading to settle at $2.735.
Radiant Solutions said changes on Monday to its six- to 10-day (April 21-25) outlook were “in the cooler direction compared to the Sunday report and especially so across the Eastern Half versus Friday’s expectations. Below normal temperatures are now forecast for most areas east of the Rockies, with key features including high pressure spanning the northern tier from the Midwest to the East and a storm system tracking across the South.
“Colder risks are associated with this setup at mid-period along the East Coast, associated with onshore flow for then,” Radiant said. “Any warmer changes are focused in the West, and aboves are seen here for most of the period.”
Bespoke Weather Services said it viewed the forecast changes over the weekend as “colder through the short- and medium-term but warmer through the long-term as the pattern looks to break and gas-weighted degree days (GWDD) move back toward seasonal averages.
“We do note short-term GWDDs a bit above average, with the forecast revised a bit cooler most days out of the next week,” Bespoke said. “This could keep short-term cash prices elevated and provide some support to the market. However, model guidance shows increasing confidence that by April 23 or April 24 this pattern breaks down with warmth moving across the Midwest and gradually sliding East.”
NatGasWeather.com this week is setting up for another duel between a bullish storage deficit and the bearish influence of record-level Lower 48 production.
“Bulls finally regained the momentum Friday after having failed to over the past month when colder than normal trending weather patterns didn’t act as a catalyst to rally” as production helped keep prices down, the firm said.
The inventory deficit versus recent norms could widen to around 475 Bcf over the next two weeks, according to NatGasWeather.
“Clearly this is a bullish level, and record production will need to chip away at it prior to the arrival of summer heat,” the firm said. The “onus this winter had been on cold weather proving it,” but conditions have changed “to where record production now carries the burden of reducing deficits by a meaningful amount prior to the arrival of what we expect to be a hotter than normal summer.”
May crude oil was set to open about 80 cents lower at around $66.59/bbl, while May RBOB gasoline was trading about 2.2 cents lower at around $2.0430/gal.