Natural Gas futures continued to fall in early trading Tuesday, as the new projections did nothing to improve the general temperature picture for the next two weeks, which remains mixed. The December Nymex contract was down 18.8 cents to $5.239/MMBtu at roughly 8:50 a.m. ET, following an 8.9-cent loss the previous session. According to NatGasWeather, overnight falls in Dutch Title Transfer Facility pricing may have contributed to early selling in Henry Hub futures, with domestic production strength also having a bearish impact on prices.
The firm’s temperature outlook did not change significantly overnight, with the American and European weather models trending warmer around the middle of next week but shifting slightly more remarkably for the Nov. 19-21 time frame. As a result, forecasts show “exceptionally modest demand” for the rest of this week, with a shift to increased demand this weekend and into next week when colder weather moves across the Great Lakes and Northeast, according to the business.
Longer-range estimates from the European model released on Monday revealed that the pattern for December would be warmer than usual throughout large swaths of the United States and Europe. This could be significant since we expect Natural Gas markets to closely monitor December weather projections, with the onus being on cold to justify considerably higher year-over-year pricing.
The pattern in the 11-15 day period from Nov. 19-23, according to Maxar’s Weather Desk, is “historically connected” with colder temperatures in the Midwest and above-normal conditions in the Southwest at this time of year.