Natural gas futures rose substantially in early Trading Tuesday, owing to increasing cooling demand predictions in recent weather model runs. At roughly 8:50 a.m. ET, the Nymex July contract was up 9.2 cents to $3.162/MMBtu. Following a run of the European weather model that showed a significant increase in expected cooling degree days (CDD), analysts at EBW Analytics Group said the July contract “quickly rebounded” in after-hours Trading after finishing 2.7 cents lower at $3.070 in Monday’s session.
According to the business, the increase in CDD was caused by forecasts for weaker cooling in the Midwest and East next week. The EBW analysts said, “Overnight, the European model kept its late-day gains, and the American, while still cooler, posted its own large gain. With both models now warmer than during the regular Trading session yesterday, the July contract is poised to rise further this morning.”
The American weather model added 7 CDD in its overnight run, according to NatGasWeather. However, due to a bombardment of weather systems tracking across the Great Lakes and East, the model projected a trend that “still wasn’t quite hot enough June 15-20.” The pattern isn’t as remarkable as it needs to be regarded strongly bullish across the Great Lakes and eastern region of the United States from June 15-20.
Prices are at multi-week highs, indicating that it’s hot enough to satisfy. Meanwhile, NGI’s model predicts a 100 Bcf injection for the week ending June 4 based on this week’s Energy Information Administration (EIA) storage report. This compares to a 95 Bcf build a year ago and a 92 Bcf injection during the last five years.For the upcoming EIA report, Energy Aspects released a preliminary estimate for a 111 Bcf injection. For the time, the firm predicted a 0.3 Bcf/d decline in production.