Notable warm trends from weather guidance over the weekend helped push natural gas futures prices several cents higher in early trading Monday. The October Nymex contract was up 6.6 cents to $2.680/MMBtu shortly after 8:30 a.m. ET.

Maxar’s Weather Desk observed “large warm changes” over the weekend for the eastern half of the country in its updated six- to 10-day forecast Monday.

“Much above normal temperatures are forecast in the Midwest, South and East, with early peaks in the mid-80s in Chicago and low 90s around mid-period in the Mid-Atlantic,” Maxar said. “Light offshore flow will have aboves in California as well, while rounds of unsettledness keep the Northwest closer to normal.”

Further out in the 11-15 day period, Maxar also noted warmer trends compared to Friday’s expectations.

“Warm changes are focused in the Eastern Half under continued above to much above normal coverage,” the forecaster said. “...Despite some disagreement from the models in the regional details, general warm support has confidence being at moderate levels overall.”

Even with guidance showing widespread above normal temperatures, EBW Analytics Group analysts noted the expected demand is still mitigated in absolute terms given the time of year.

The cooling degree days added for the Sept. 20-26 period “should be kept in context,” the EBW analysts said. “Even on the hottest days, temperatures will only rise to the upper 80s or low 90s -- 5-10 degrees cooler than the hottest days earlier this month -- and then cool down quickly early in the evening as the sun sets sooner each day.

“Even with the hotter shift, power sector demand is starting to fall rapidly. The upward price movement early this week is still likely to stop short of $2.70 and reverse by next week.”

Saudi Oil Attack

Meanwhile, in the wake of reported drone attacks over the weekend on oil infrastructure in Saudi Arabia, crude prices were trading sharply higher early Monday.

October crude oil was up $5.59 to $60.44/bbl just after 8:30 a.m. ET. October RBOB gasoline was up about 16.0 cents to $1.7129/gal.

“Saudi Aramco’s oil processing and production facilities were attacked over the weekend, leading to the suspension of 5.7 million b/d of production,” analysts with the BMO Capital Markets wrote late Sunday. “While the duration of the suspension could prove brief, the attack should serve as a reminder that the Middle East remains volatile and that there is limited spare capacity outside of Saudi Arabia to deal with unexpected disruptions in oil production.”

Raymond James & Associates Inc. analysts emphasized the significance of the events in Saudi Arabia, estimating that the attacks took around 5% of global supply offline.

“In recent months, oil prices have traded predominantly on demand-related fears surrounding the U.S.-China trade war, but as this attack illustrates, geopolitics can be much more consequential to the overall oil supply/demand equation than the oil market has been pricing in,” the Raymond James analysts said.

“...Regardless of who is behind the attack, a supply disruption on this scale is an extraordinary event -- no single disruption on this scale, either in barrel terms or percentage terms, has occurred in decades.”