Bearish forecast trends over the weekend, lowering heating demand expectations for the first half of December, ushered in further heavy losses for natural gas futures in early trading Monday. 

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Coming off a 45.7-cent swoon in Friday’s session, the January Nymex contract was down another 43.7 cents to $5.844/MMBtu at around 8:40 a.m. ET. February was off 42.5 cents to $5.744.

Weather models trended warmer over the weekend, including a “massive” decline of 23 heating degree days in the American model’s outlook, according to NatGasWeather.

Both models advertised a “quite bearish” pattern for this week through Dec. 15, showing “much warmer than normal temperatures covering the southern and eastern U.S. most days,” NatGasWeather said. 

The weekend weather data did tease the possibility of colder temperatures and stronger national demand for the Dec. 16-20 time frame, according to the firm.

“However, the weather data had once forecast a frigid U.S. pattern” for the first week of December “only to trend notably warmer,” NatGasWeather said. “Then the weather data also forecast a frosty pattern” for the second week of December “only to again back off considerably.

As a result, market participants are likely to view forecast cold for Dec. 16-20 with skepticism for now, NatGasWeather said.

EBW Analytics Group analyst Eli Rubin characterized the weekend forecast trends as an unexpected “collapse” in heating demand given the extent of warmer trends in the more accurate one- to 10-day window.

The drop in weather-driven demand, estimated as a 26 gas-weighted degree day decline versus Friday’s expectations, “recharts the December natural gas market outlook,” Rubin said. 

This comes as the Freeport LNG terminal on Friday revealed another delay to its return to service.

The latest update to the Texas export terminal’s timeline “slashes another 25 Bcf of anticipated demand,” Rubin said. “Freeport restart risks remain weighted toward further, modestly bearish in-service delays.”

It’s still relatively early in the winter heating season, but “falling weather-driven demand and Freeport delays minimize the chances for an extreme bullish outcome,” Rubin added. This raises the question of “whether pricing Nymex gas winter risk premiums at 10-year highs is justified.”

In technical terms, prices early Monday were testing a key band of resistance pegged by ICAP Technical Analysis at $5.840-5.727-5.645.

“Should bears succeed” in taking out resistance, “we lower the bar,” ICAP analyst Brian LaRose said. “…Should the bears fail, a sharp snap back in the opposite direction is possible.”