Bulls Get A Boost From Overnight Weather Models; October Called A Penny Higher
October natural gas is set to open a penny higher Wednesday morning at $3.13 as overnight weather models turned warmer. Overnight oil markets rose.
In its morning six- to 10-day outlook WSI Corp. said, “‘[Wednesday’s] forecast is generally warmer over much of the East, Midwest, and for parts of the West Coast.” Continental United States population-weighted cooling degree days ““for the period are 31.5, 2.7 above yesterday and 12.1 above normal.” Gas-weighted heating degree days “are 8.7, -1 from yesterday and -13 from normal.”
WSI cautioned that “temperatures could run even warmer for the Midwest and East early-mid week under a strong ridge aloft. Portions of northern California, especially near the coast, may also run warmer than forecast early-mid next week under a ridge, especially if an offshore flow can develop.”
Gas buyers seeking incremental supply for Thursday power generation across the broad MISO footprint may be in luck as wind generation is expected to pick up Thursday. “Summer-like conditions will expand across the power pool this week,” said WSI. “A residual frontal boundary and daytime heating will support a slight chance of isolated showers and thunderstorms during the next couple days. Temperatures will range in the 70s, 80s to low 90s.
“Wind gen will decrease today. Output will bottom out around 2 GW during the late afternoon and early evening. After this brief decline, a surge of southerly winds will push output back up to 8-10-plus GW late tonight into Saturday.”
The wrenching earthquake that hit Mexico Tuesday does not appear to have impacted gas exports. “So far there does not yet appear to be a clear impact to U.S. exports to Mexico as a result of yesterday’s earthquake,” said industry consultant Genscape in a morning report. “A 7.1 magnitude quake struck about 75 miles southeast of Mexico City yesterday afternoon, just one week after an even larger quake hit the southern states of Oaxaca and Jalisco, and on the exact same day one of the most devastating quakes in Mexican history struck Mexico City 32 years ago.”
In overnight Globex trading the expiring October crude oil added 54 cents to $50.02/bbl and October RBOB gasoline rose fractionally to $1.6578/gal.
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