A notable warm shift in the 15-day forecast over the weekend had natural gas futures trading sharply lower early Monday, with the front month slipping to its lowest level in more than a week. The April contract was down 8.3 cents to $2.782/MMBtu shortly after 8:30 a.m. ET.

Over the weekend both American and European guidance made “significant warmer changes” to the outlook for the next two weeks, according to Bespoke Weather Services.

The forecast changes included a weaker negative Eastern Pacific oscillation, “along with a continued lack of blocking on the Atlantic side, both of which combine to lessen cold influences across much of the nation,” even with a “strongly positive” Pacific/North American teleconnection, Bespoke said. “We have also seen a notable cold bias in the modeling due to model errors in handling snow cover, which also played a role in the big weekend warmer changes.

“There are still some colder than normal days in the forecast, but none of them are all that strong, and there are enough warmer days” to bring total expected gas-weighted degree days for the next two weeks in line with seasonal norms, the forecaster said.

Radiant Solutions similarly noted warmer changes over the 15-day outlook period compared to forecasts issued on Friday and Sunday.

In the 11-15 day period, the warm trends result from the positive Pacific/North American teleconnection trough in the northern Pacific “shifting eastward and in the direction of western North America,” Radiant said. “This could allow for an increase in unsettledness along the West Coast but also downstream warming. The European model is given favorability in the evolution, and includes above normal temperatures in the Midwest and below normal temperatures limited to the South and Mid-Atlantic early on.”
Radiant’s six- to 10-day outlook also saw warmer changes compared to earlier forecasts, but this period continued to feature “widespread coverage of below normal temperatures” from the Rockies and Plains toward the East Coast.

The latest warm shift in the forecast means the potential for significant winter cold before the end of the withdrawal season is “effectively at an end,” which is likely to push futures prices lower this week with “little upside risk remaining,” according to EBW Analytics Group CEO Andy Weissman.

“At this point in the storage cycle, the main question facing the market is the potential strength of demand in the Gulf of Mexico this summer, which is expected to increase significantly compared to last year” on a combination of new liquefied natural gas export capacity and continued increases in exports to Mexico, Weissman said.

“The July natural gas contract has been showing significant strength recently, selling at a rising premium. If this strength continues, it could reduce the decline in the April contract, which closed just 9.2 cents below the July contract last Friday.”

April crude oil futures were trading 27 cents higher at $56.34/bbl shortly after 8:30 a.m. ET, while April RBOB gasoline was up about 1.7 cents to $1.8190/gal.