Markets

December natural gas is set to open 19 cents lower Friday morning at $4.30 as traders jettison forecasts of cold next week in favor of estimates of near-term warming. Overnight oil markets surged higher.

The market may not be convinced that natural gas storage is adequate to sustain demand through another severely cold winter, but sustained output from Appalachia should convince the skeptics soon enough, according to BNP Paribas.

New England should have sufficient resources in place this winter to meet consumer demand for electricity, but “insufficient pipeline capacity to meet power generators’ demand for natural gas continues to be a particular concern during the winter months,” according to the region’s grid operator.

Natural gas forwards markets appeared to be taking a breather this week, with most market hubs shifting less than a nickel from Monday to Wednesday, amid some see-sawing in Nymex futures and uncertainty in long-range weather forecasts.

December natural gas is expected to open a penny higher Thursday morning at $4.38 as weather forecasts show ongoing cold temperature patterns and traders await a government report that is expected to show the first storage withdrawal of the season. Overnight oil markets were narrowly mixed.

Natural gas futures surged following the release of government storage figures showing a higher withdrawal than what the market was anticipating.

After a two-year investigation, a U.S. Senate subcommittee said Wednesday it is concerned about the involvement of three of the nation’s major bank holding companies in the commodities markets, claiming they engaged in risky activities and unfair trading advantages, and have inadequate safeguards in place to avert a financial disaster.

Next-day gas prices were widely mixed in Thursday’s trading as gains in the Marcellus, Mid-Atlantic, and New England were unable to counter more pervasive weakness in the Gulf, Midwest, Midcontinent, Rockies, and California. The overall market change was unchanged.

December natural gas is set to open 18 cents higher Wednesday morning at $4.42 as overnight six- to 10 and 11- to 15-day forecasts turned colder mainly in the Midwest. Overnight oil markets rose.