Natural gas futures continued to slide early Tuesday as the market showed its disappointment in guidance that still pointed to near-normal temperatures heading into December. The December Nymex contract was off 4.4 cents to $2.522/MMBtu shortly after 8:40 a.m. ET.

The weather outlook remained mostly unchanged in the latest data heading into Tuesday’s trading, with models maintaining “the majority of the demand losses from the weekend runs,” according to Bespoke Weather Services.

“We still see a pattern that exhibits variability, not straying all that far from normal on any given day” but ending up “on the warmer side of the long-term normal for the 15-day period as a whole,” the forecaster said. “The early December pattern still sees a battle between what looks like an unfavorable Pacific pattern for cold air delivery” and some North Atlantic Oscillation blocking.

“These battles are typically won ultimately by the Pacific side of the pattern, and we feel that will wind up being the case here as well.” Still, Bespoke said confidence is “slightly below average.”

Maxar’s Weather Desk highlighted a “small warmer change” in its latest forecast Tuesday for the six-to-10-day period.

The outlook includes “above-normal temperatures focused in the North-Central, while mixed conditions are the story in the South and West,” the forecaster said. “In the East, the period starts on the cold side of normal but warms to above-normal levels late. Confidence is around average for this time frame.”

Looking further out at the Nov. 29-Dec. 3 period, Maxar said its forecast “does not diverge more than a few degrees from normal and remains of lower confidence. Compared to the previous outlook, changes are warmer in Central.” The pattern “has warm leans in the South and East through mid-period before a round of slightly below normal temperatures make their way eastward.”

Last week saw two days of “January-like cold” that provided a “good testing ground” for how the market will react to strong gains in weather-driven demand this winter, according to Energy Aspects.

“However, two cold days in November will not push up gas heating intensity like a more sustained occurrence would have,” the firm said. Contrasting last year’s early winter cold with the recent Arctic blast, November 2018 unsurprisingly “saw a price shift of greater magnitude over a shorter time frame” given that the “overarching concern was deliverability and, by extension, preservation of inventories.
“The overarching concern in November 2019, based on our balances, has been how to contain a ballooning end-October 2020 carryout to a level the market will find acceptable.”

December crude oil futures were trading 74 cents lower at $56.31/bbl shortly after 8:40 a.m. ET, while December RBOB gasoline was off fractionally at $1.6135/gal.