A colder shift in forecasts over the weekend, including increasing potential for a chillier pattern into the middle of next month, saw natural gas futures rebound in early trading Monday. The February Nymex contract was up 8.7 cents to $2.533/MMBtu at around 8:40 a.m. ET.
Analysts at EBW Analytics Group attributed the early morning price gains to a “rebound” in projected gas-weighted heating demand from both the European and American weather models over the weekend.
“Further, a more variable pattern emerged, with alternating shots of colder and milder air,” the EBW analysts said. “The cold shots are forecast to be colder than last week, though, and the milder periods are not nearly as warm.
“Model uncertainty remains high, dictating a cautious approach to the market. At least for now, the downside risk appears significantly lower and the odds for colder mid-February weather are increasing.”
The pattern sets up potential for gas prices to strengthen amid further erosion of the storage surplus, according to the firm.
Bespoke Weather Services estimated “solid demand gains” from the weekend model changes, including an additional 15-20 gas-weighted degree days over the next couple weeks.
“Some of these colder changes were for this week, not just far out in the more unreliable extended forecast,” Bespoke said. “It is still not a cold pattern by any means, but a decent step away from the big warmth we saw the other day.”
Given a “reasonably supportive” supply/demand balance, “we could see further upside as we head into February expiration Wednesday, keeping in mind that we have rallied into the expiration of the last two contracts.”
Meanwhile, going back to the 187 Bcf weekly withdrawal from U.S. natural gas stocks the Energy Information Administration (EIA) reported on Friday, analysts at Tudor, Pickering, Holt & Co. (TPH) said the print came in bullish versus consensus expectations and the five-year average even as degree days for the week were down 12% versus norms.
“Power generation demand continues to be a bright spot as soft seasonal gas pricing and a recent drop in wind generation contributed to record seasonal power burn for the report week,” the TPH analysts said.
This week’s report could see a return to a lighter-than-normal withdrawal, but next week’s EIA report, reflecting the current week’s balances, “looks to be starting on the right foot, with the highest residential/commercial numbers observed so far this winter,” according to the firm.
The “solid cooling trend” in forecasts over the weekend could put gas prices on a “positive trajectory” to open the week, the TPH analysts said, adding that they “continue to see upside to $3.25 this summer.”
March crude oil futures were off 10 cents to $52.17/bbl at around 8:40 a.m. ET, while February RBOB gasoline was down fractionally to $1.5460/gal.
"gas" - Google News
January 25, 2021 at 08:56PM
https://ift.tt/36eaO6z
Weather Models Show 'Solid Demand Gains' Over Weekend as Natural Gas Futures Rebound - Natural Gas Intelligence
"gas" - Google News
https://ift.tt/2LxAFvS
https://ift.tt/3fcD5NP
Bagikan Berita Ini
0 Response to "Weather Models Show 'Solid Demand Gains' Over Weekend as Natural Gas Futures Rebound - Natural Gas Intelligence"
Post a Comment