Natural gas futures pushed higher in early trading Tuesday following gains in projected weather-driven demand from the latest forecasts. Coming off a 4.2-cent gain in the previous session, the February Nymex contract was up 10.3 cents to $2.684/MMBtu at around 8:45 a.m. ET.
The American Global Forecast System model added 12 heating degree days (HDD) overnight, while the European model picked up 3-4 HDD by trending slightly colder for the Jan.16-19 time frame, according to NatGasWeather.
“No major changes to the timing of major features to impact the U.S. over the coming 15 days, with conditions too mild the rest of this week, a bump in demand this weekend into the start of next week,” NatGasWeather said. The pattern is expected to shift “back to light demand Jan. 13-17 before what should finally be a cold enough pattern Jan. 18-20 as Canadian air pushes more aggressively into the Midwest and Northeast.”
Coming off “much warmer than normal” temperatures so far this winter, it will be “important this colder Jan. 18-20 period not back down and disappoint,” the firm said.
Maxar’s Weather Desk similarly highlighted colder trends in the second half of the Jan. 15-19 time frame, covering days 11 to 15 of the forecast.
“This is especially the case in Central, although the East is likewise colder than previous for then,” Maxar said. “…Aboves favor the North and West early in the period, before a colder air mass is directed toward the Midwest late.”
In the six- to 10-day period, covering Sunday through Jan. 14, Maxar made colder adjustments to its latest forecast for the Midwest and South.
“Otherwise, similar themes as previous are retained elsewhere,” the forecaster said. “The themes include below normal temperatures for most days from Texas to the Southeast and above normal coverage along the Northern Tier and in the West.”
Meanwhile, looking at the technicals, bulls early Tuesday were testing a key band of resistance — from $2.665-2.684 — highlighted by analysts at ICAP Technical Analysis.
“Will be watching to see if they can quickly find their footing Tuesday,” ICAP analyst Brian LaRose said in a note to clients late Monday. “If they can, we could be looking for another test of this band, possibly even a run at” the $2.762 level “before the day is out.
“Conversely, a down day Tuesday would immediately jeopardize the case for a greater recovery.”
February crude oil futures were up 64 cents to $48.26/bbl at around 8:45 a.m. ET, while February RBOB gasoline was up about 2.1 cents to $1.3934/gal.
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