January Natural Gas after the end of December; Forecasts show ‘Critical Shift’ Hot – Natural Gas Intelligence

By the end of last week, natural gas futures had plummeted sharply in recent months, with analysts pointing to temperature forecasts and weak fundamentals. The January Nimex deal fell from 51.5 cents to $ 4,962 / MMBtu around 8’s 40’s ET.

EBW Analytics Group senior energy analyst Eli Rubin identified a “stabilizing inflation” with little backward pressure.

In addition to “modest increases” in demand for liquefied natural gas, Friday’s high activity “despite further deterioration in the basics of natural gas,” Rubin said.

Forecasts have reduced heat demand compared to the forecasts before Thanksgiving, analysts say.

“Production scales, fluctuating and often at the end of the month, increased by 1.0 Bcf / d per week. The end of March storage is conveniently above 1,500 Bcf, ”Rubin added. January is already well off on Monday morning. There could be further losses later this week, especially as mild weather from Wednesday to Friday reduces market demand and puts pressure on Henry Hub’s prices.

Friday model races showed some “moderate cold changes”, but forecasts over the weekend showed a “significant shift” in warmth, according to the Spoken weather service.

The heatwave is the result of models going “cold in both the Pacific and Atlantic patterns in the United States after the first few days of December,” Besspock said. “This warm-up forecast this week foretells a slight cold to the east this weekend and early next week, and then we have a warm design.”

The 15-day viewing conditions are in the process of keeping the gas-weighted degree total “easily below normal”, the organization said.

Friday’s settlement prices appear to be “wildly exaggerated” and may be the result of “normal contract expiration,” Bespock said. If the weather does not threaten to freeze by mid-December, “in our view it is only necessary to lower the January contract to $ 4.50.”

Looking at this week’s Energy Information Management (EIA) repository report, the NGI machine learning model predicts a net release of 58 Bcf by the end of the week on November 26. That compares with both the five-year average (less than 31 Bcf) and both. Spending money for the session a year ago (minus 4 BCF).

After the start of the exit season, Tudor, Pickering, Holt & Co. (TPH) Analysts say.

Domestic / commercial demand is growing and “it will continue to support energy – far above historical trends because coal production will remain weaker than normal, although wind power is setting new season highs in recent weeks,” said TPH analysts.

In terms of supply, according to TPH, estimates indicate that US dry natural gas production from 94.5 Bcf / d to 95.5 Bcf / d is “region-bound”, slightly lower than 96 Bcf / d in early November.

January crude oil futures rose from $ 3.86 to $ 72.01 / bbl around 8 40 40 am ET.

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