Cold ECMWF vs Milder GFS

Written by on December 22, 2020 in NatGasWeather - No comments

Tuesday, December 22:  Jan’21 an’21 nat gas futures closed slightly higher Monday in choppy trade.  The weather data yesterday had the GFS trending warmer and the European model (EC) trending colder, putting a hefty 25 HDD’s difference between them.  The overnight GFS and European models remained far apart as the GFS held its milder view and the EC trended further colder for Dec 29-Jan 3.   Our verification data shows the EC performing better over the past 30-days, suggesting the GFS is too warm and needs to add demand.   If it’s the EC that loses a greater amount of demand, the nat gas markets could quickly become disappointed.  But with the EC not backing down from its colder stance, this makes today’s early morning (6z) and midday GFS (12z) data important to see if it finally gains demand to close the gap.    Also of interest, our data shows LNG feedgas for today being up slightly over yesterday and back over 10.5 Bcf.   July’21 prices have tested $2.72 numerous times over the 10-days and are again near it in overnight trade.  Will the EC holding its colder view and LNG being up slightly vs Monday be enough for Jan’21 prices to finally take out $2.72?


The GFS weather model has been running notably warmer compared to the European model by more than 25 HDD’s.  This is a rather large difference that needs to be resolved.


Our verification data over the past 30-days has the EC performing better than the GFS. The GFS has been running too warm and we expect this is again the case this time. But if the EC is too cold, it could disappoint.


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