FXEMPIRE
All
Ad
Corona Virus
Stay Safe, FollowGuidance
World
43,346,888Confirmed
1,159,097Deaths
31,905,975Recovered
Fetching Location Data…
Advertisement
Advertisement
James Hyerczyk
Natural Gas
Oil and gas industry. Gas processing factory

Natural gas futures are edging lower for a third session on Wednesday, a far cry from Monday’s gap higher opening. Uncertainty over the weather and increased production are exerting the most pressure on the market, while a mixed cash market is offering little support.

At 06:26 GMT, December natural gas is trading $3.186, down $0.061 or -1.88%.

Volatile Weather Models Driving the Price Action

The overnight models lost some of the projected demand for the next couple of weeks, with the Global Forecast System (GFS) giving back nearly 10 heating degree days (HDD) and the European model losing a few more HDD on top of the several it lost Monday, according to NatGasWeather.

However, the midday GFS gained much of that back and was once again notably colder than the European model, especially with a cold shot into the Midwest and Northeast during the October 21-25 period.

The European model showed a cool shot, but it was confined to the Rockies and Plains, the forecaster said. The East, meanwhile, is quite warm in what NatGasWeather called “a relatively bearish set up.”

These big weather model differences need resolving, according to the forecaster. “To our view, the GFS model is likely too cold, as it was in most instances last winter. But the European model is probably too warm after the coming Friday-Monday cold shot, so there’s potential it adds demand later.”

Advertisement

Gulf of Mexico Production Continues to Return

Natural Gas Intelligence (NGI) reported that based on offshore operator reports, the Bureau of Safety and Environmental Enforcement said around 30% of the natural gas and 44% of the oil produced in the Gulf of Mexico remained shut-in. All personnel from nondynamically positioned rigs in the Gulf of Mexico were back to work, and all the dynamically positioned rigs that had been moved off location ahead of the storm were back on location.

LNG Demand Firming

NGI reported that export demand remained strong Tuesday. NGI data showed feed gas deliveries to U.S. liquefied natural gas (LNG) terminals edging up about 44,000 Mcf to 7.08 Bcf, which is about 46,000 Mcf shy of week-ago feed gas levels.

Daily December Natural Gas

Daily Forecast

The daily chart indicates that prices are likely headed into a short-term retracement zone at $3.161 to $3.121. Trader reaction to this area could determine the near-term direction of the market.

“The issues moving forward will be the trends in the weather pattern, along with, of course, LNG volumes,” Bespoke Weather Services said. However, also of importance will be how much power burns change once this current heat in parts of the South, especially Texas, wanes late this week. “For now, we see risks near equal to upside/downside.”

For a look at all of today’s economic events, check out our economic calendar.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US