A skeptical natural gas futures market remained in wait-and-see mode early Monday as forecasts continued to suggest a move away from the seemingly endless warm pattern that has dominated January to this point. February Nymex futures were up 1.2 cents to $2.214/MMBtu shortly after 8:30 a.m. ET. 

The latest guidance heading into Monday’s trading trended warmer near-term but continued to show a shift to normal or colder-than-normal temperatures starting around next Monday (Jan. 20), according to Bespoke Weather Services.

“Over the weekend, we saw a continuation of strong run-to-run volatility in the major weather models, looking more strongly bullish on Saturday before backing off yesterday, then coming back a little colder overnight,” the forecaster said, adding that “the big-picture ideas have stayed rather consistent, which is more important to us than chasing run-to-run changes.

“This week did shift warmer, and that doesn’t surprise us, since the signals always seemed to suggest the best chance of cold would come after Jan. 20, but it may keep the market skeptical of any cold at all with near-term changes still being warmer.”

With models honing in on a pattern shift that suggests a step-change higher in heating demand by next week, the question remains how and when the market might respond, according to EBW Analytics Group analysts.

“The timing, magnitude and duration of any move up remains to be seen,” they said. “Extreme warm weather is expected to continue for several more days, restraining cash prices -- and near-term weather has been trending warmer than predicted all winter.

“If the weather pattern shift occurs this coming weekend, as currently predicted, demand for natural gas could jump by more than 20 Bcf/d and remain elevated for three to three and a half weeks, pushing prices higher.”

Meanwhile, the recent unseasonable warmth has put this month on track to become the warmest January on record for at least a decade, according to Genscape Inc.

Population-weighted net degree days (DD) month-to-date are averaging about 3 DD warmer than January 2017, the previous warmest January over that same time frame, the firm said. That’s also about 6.6 DD warmer than the 10-year month-to-date average.

“While there is a cold system bearing down on the West Coast, the more densely populated demand markets to the east of the Mississippi and along the Gulf Coast are projected to continue experiencing mild weather conditions in the week ahead,” Genscape senior natural gas analyst Rick Margolin said.

February crude oil futures were trading 14 cents higher at $59.18/bbl shortly after 8:30 a.m. ET, while February RBOB gasoline was up fractionally to $1.6627/gal.