January Natural Gas Retreats on ‘Flip-Flopping’ Weather Models; Hefty Storage Withdrawal Expected

As the market prepared to digest the latest government inventory data, expected to show a hefty withdrawal from U.S. gas stocks, mixed overnight weather trends saw natural gas futures retreat in early trading Wednesday. The January Nymex contract was off 6.7 cents to $2.713/MMBtu at around 8:35 a.m. ET.

After previously showing a warmer outlook compared to the European weather model, the American Global Forecast System (GFS) trended “notably colder” overnight to add 15 heating degree days (HDD), according to NatGasWeather.

However, the European model countered by dropping 8 HDD, bringing it close to the GFS.

“Prices gained overnight on the colder-trending GFS, then sold off after the European disappointed on warmer trends,” the firm said. “As we’ve been stating...