Natural gas futures continued to ratchet higher in early trading Wednesday as the latest forecasts maintained a chilly outlook for the next two weeks. The December Nymex contract was trading around $2.666/MMBtu as of 8:40 a.m. ET, up 2.7 cents.
The weather outlook remained largely unchanged in the overnight guidance, with models continuing to advertise a cold pattern for the first half of November, according to Bespoke Weather Services.
Both the American and European models “again hint at changes that could bring about a milder pattern around the middle of the month, but as we have been pointing out, this keeps getting delayed,” Bespoke said. “While we believe that evolution ultimately does work out, confidence remains low until we see this progress forward in the forecast. As long as we see a strong upper level ridge anomaly up into Alaska, the bias of the pattern remains to the colder side.”
Cold is expected to be “focused in the middle of the nation” but with enough chilly air “dropping in to keep national demand above normal levels in such a pattern.”
In its latest forecast for the period from Monday (Nov. 4) through the Nov. 8, Maxar’s Weather Desk called for much-below normal temperatures in the Midwest.
“A strong ridge over Alaska continues to direct colder air masses southward from Canada and into the U.S.,” leading to widespread below and much below normal temperatures in the eastern two thirds of the Lower 48, Maxar said. “The exception to the cold pattern themes are in the East on Day 7, ahead of a mid-period passage of low pressure. The south extent of the colder anomalies is a point of model volatility, and the forecast is warmer along the Gulf Coast versus the previous outlook.”
For Nov. 9-13, Maxar expects cold air to continue to flow into the eastern half of the Lower 48, resulting in much below normal temperatures in the Midwest and East through the midpoint of the period and below normal conditions sticking around until late in the period.
“Models are warmer day/day but remain largely spread, with the American model being colder than its European counterpart,” Maxar said. “Our forecast falls between these ensemble projections.”
Meanwhile, looking ahead to this week’s Energy Information Administration (EIA) storage report, Energy Aspects issued a preliminary estimate for a 90 Bcf injection, factoring in a 1 Bcf/d “surge” in production week/week.
“However, a minor week/week decline of 0.2 Bcf/d in Canadian net trade and similar increases in power burn” and liquefied natural gas feed gas demand should leave this week’s reported injection “relatively flat” versus the 87 Bcf build EIA reported last week, according to the firm.
December crude oil futures were trading at $55.34/bbl at around 8:40 a.m. ET, down 20 cents, while November RBOB gasoline was trading around $1.7003/gal, up about 1.5 cents.