December natural gas is set to open 15 cents higher Monday morning as key weather models trended sharply colder. Overnight oil markets gained.
Weather forecasts overnight turned sharply colder. Commodity Weather Group in its morning six- to 10-day forecast shows the eastern two-thirds of the country at below-normal readings with the desert Southwest, Great Basin and California as above to much above normal. “The modeling over the weekend continued their trend started late last week to intensify a high-latitude blocking pattern that optimizes cold air transport into the U.S,” said Matt Rogers, president of the firm.
“The jet stream pattern looks impressive, with ridging up along the West Coast connecting to the Yukon and Alaska as well as the North Pole to generate a strong negative Arctic Oscillation (AO). Such a strong apparatus suggests pattern durability also with the growing potential for November 2014 to outperform 2013’s demand story nationally. [Monday’s] forecast favors the European ensemble more than other guidance as it was the first (since last Wednesday) to start showing this significant pattern transition, but since it is November, we still need to keep a close watch out for variability in the pattern (even last year we saw occasional warmer breakdowns in the colder November pattern).”
One forecaster doesn’t see the higher open as warranted by “facts.”
“Weather patterns trended colder over the weekend on a couple weather systems starting later this week, but not enough to justify the extreme move that occurred,” said Natgasweather.com in a Monday morning report. “In addition, the 00z operational GFS [Global Forecast System] has just come in and it’s slightly warmer for the system late this week and quite a bit warmer for the November 11-12th system, which is the one that had trended the coldest over the weekend.”
Tom Saal in his work with Market Profile is looking for the market to test last week’s value area at $3.849 to $3.641 before moving on and testing $4.244 to $4.076. “Look for a short-covering rally…and we know who is net short now…professional speculators,” he said in a Monday morning note to clients.
In overnight Globex trading December crude oil added 29 cents to $80.83/bbl and December RBOB gasoline gained fractionally to $2.1515/gal.
© 2023 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |