September natural gas is expected to open 2 cents lower Monday morning at $2.87 as the market continues to grapple with the load-killing aspects of Hurricane Harvey. Overnight oil markets were mixed with crude oil easing, but gasoline soaring on storm-related supply issues.
If all the damage southeast Texas has suffered were not enough, more rain is forecast. “Harvey’s circulation is located in a near-ideal spot for funneling vast amounts of moisture from the Gulf of Mexico toward the upper Texas coast,” said Wunderground.com in a weekend report to clients. “Here, converging winds at low levels have been concentrating the moisture into north-south-oriented bands of intense thunderstorms with torrential rain. Since Harvey is barely moving, these bands are creeping only slowly eastward as individual cells race north along them-a ”training’ set-up that is common in major flood events.
“Mesoscale models, our best guidance for short-term, small-scale behavior of thunderstorms, show little sign of relief for southeast Texas anytime soon. Convection-resolving mesoscale models, which have a tight enough resolution to depict individual thunderstorms, are an invaluable tool in situations like this. The mesoscale nested NAM model predicts that 20 inches to 30 inches of additional rainfall is likely through Tuesday across the Houston metro area, with even larger totals at some points.”
Broader scale overnight weather models moderated in key Midwest and eastern markets. “[C]ooler adjustments from Friday dominate the Midwest, East, and South over the next two weeks including one stronger cool push into the Midcontinent by late in the six to 10 day that carries into the early 11-15 day,” said Matt Rogers, president of Commodity Weather Group in a morning report to clients.
Otherwise “very hot weather in the West continues to be the biggest heat story over the next two weeks with peak levels today for Burbank and Sacramento (around 106F) and continued 100-degree weather this week with moderate to strong heat through the six to 15 day also (with hotter spikes at times). The Pacific Northwest is also running hotter this coming weekend (six to 10 day) with mostly hotter changes throughout the West in the 11-15 day too,” Rogers said.
Tom Saal, vice president at FCStone Latin America in Miami in his work with Market Profile expects the market to test last week’s value area at $2.969 to $2.917 “then test” $3.087 to $3.011 if time permits before the expiration of the September contract on Tuesday.
In overnight Globex trading October crude oil fell 47 cents to $47.40/bbl and October RBOB gasoline added 5 cents to $1.5922/gal.
© 2022 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |