December natural gas is expected to open a penny higher Wednesday morning at $2.91 as overnight weather data turned slightly cooler. Oil markets gained ground.
Forecasters near term are calling for nominal cooling. “Forecast changes were in the colder direction from the Midwest to the East, where rounds of high pressure are forecast,” said MDA Weather Services in its morning 6- to 10-day outlook for clients. “These highs originate from an established cold source region out of western Canada and lends additional cold concerns versus the forecast and models.
“This cold source region has temperatures in the much and strong below normal categories in central and western Canada while offering a period with belows in parts of the Midwest as well. The East Coast has much above normal readings at the start of the period before belows arrive late. A’s are most steady along the Southern Tier.”
A week from now MDA’s forecasts places the average temperature in Chicago at 40, 5 degrees less than normal and New York City’s average is 49, 2 degrees below normal.
Although market support at $2.50 is widely discussed, market technicians versed in Elliott Wave and Retracement don’t see that as imminent. “While a dump to the $2.500 neighborhood is still possible there are several major hurdles the bears will need to contend with before I am willing to entertain such a target,” said Brian LaRose, market analyst with United ICAP. He sees several areas of support standing in the way of a move to $2.50. Specifically the $2.87 area, $2.80, $2.73, and $2.65.
In overnight Globex trading December crude oil rose 59 cents to $54.97/bbl and December RBOB gasoline gained 2 cents to $1.7566/gal.
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