November natural gas is expected to open a penny lower Thursday morning at $3.05 as traders mull storage figures that are expected to narrow the long term storage surplus. Overnight oil markets were mixed.
Forecasters are expecting greater warmth over pivotal East and West Coast Energy markets. “[Thursday’s] 11-15 day period forecast is warmer than yesterday’s forecast across the West and East Coast,” said WSI Corp. in its morning report to clients. Portions of the Southwest and central U.S. are cooler.” Continental United States (CONUS) population-weighted cooling degree days “are down 0.5 for Days 11-14 and are now forecast to be 17.9 for the period, and CONUS” gas-weighted heating degree days “are up 0.3 to 13.4 for the period. These are 25.5 below average.
“The forecast could waver in either direction should the timing deviate slightly. The central U.S. has some warmer potential late, while the Northeast could run a tad cooler or not as warm,” WSI said.
Traders were somewhat dismissive regarding Wednesday’s firm close. “It wasn’t much of a move higher. It [November] got up to $3.089 which is where it would go on its next move up,” said a New York floor trader.
“That doesn’t mean that it is changing direction, and it is still in the range it has been in. It could go up to $3.14 to $3.16, but don’t be surprised if it falls back on itself from a lack of enthusiasm. I think some of the move was from short covering in the October contract.”
Thursday’s storage data from the Energy Information Administration (EIA) will give traders a better handle on supplies going into the winter. Estimates are coming in in the 60 Bcf range and look to contract the long term storage surplus. Last year 49 Bcf were injected and the five-year pace is for an 84 Bcf build.
ION Energy of Houston is looking for an increase of 60 Bcf and Wells Fargo calculates a 70 Bcf injection. A Reuters survey of 24 traders and analysts revealed a 66 Bcf average with a range of +50 Bcf to +73 Bcf.
In overnight Globex trading November crude oil rose 42 cents to $52.56/bbl and November RBOB gasoline fell fractionally to $1.6196/gal.
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