September natural gas is set to open 9 cents higher Monday morning at $2.68 as traders introduce a weather premium into the market. Overnight oil markets fell.
“Through the weekend we saw modest tightening of weather-adjusted burns despite production remaining quite elevated, and this tightening should be enough to continue to support prices when combined with medium-term forecast heat,” said Harrison, NY-based Bespoke Weather Services in a Monday morning report.
“Far less bearish risk is seen when moving into the long term as well, especially when compared to late last week, and thus as concerns about heat easing have generally abated; much selling last week appeared to be due to concerns that a break in the heat would be sustained. Overnight we saw GFS [Global Forecast System] operational guidance remain relatively consistent, backing off its hot IVest run last evening but still showing demand above average in most of the medium and long-term.
“The GFS ensembles have trended in this direction as well, showing ridging across the East likely to keep temperatures there above average through most of the next 15 days.
At 5 a.m. EDT Monday the National Hurricane Center (NHC) reported that Tropical Depression Fiona continued on its trajectory toward the west side of Bermuda and was 670 miles southeast of Bermuda. It was traveling west-northwest at 18 mph, and maximum sustained winds had fallen to 35 mph.
NHC also identified a tropical wave 850 miles east of the Lesser Antilles, moving to the west at 15 mph. It was given a 20% chance of tropical storm development in the succeeding 48 hours.
There is also a third system 300 miles south-southwest of the Cabo Verde Islands. NHC gave it a 100% chance of development in the succeeding 48 hours.
In overnight Globex trading the expiring September crude oil contract gave up $1.07 to $47.45/bbl and September RBOB gasoline fell 4 cents to $1.4759/gal.
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