Continued Cooler Trends Stalling Arrival of Early Heat

Written by on May 4, 2020 in NatGasWeather - No comments

Monday, May 4:   The Baker-Hughes rigs report Friday afternoon showed another large week over week decline of 53 oil rigs and a loss of 4 gas rigs. This suggests further decreases in nat gas and associated nat gas production to come. But there’s also been huge losses in demand due to COVID-19, especially in the industrial and commercial sectors.  And there’s been numerous LNG export cargoes cancelled for June.   Many factors impacting nat gas markets that normally wouldn’t.
Regarding weather trends, the weather data trended cooler for mid-May late last week and the weekend data trended further cooler with it as both the GFS and European models gained 10 HDD’s.  This could lead to a higher open, although, we must consider HDD’s this time of the year just don’t carry the same weight compared to core winter.  In addition, the coming pattern will also bring cooler temperatures into Texas, the South, and Southeast, preventing widespread heat from setting up over these important regions.  We also must consider the nat gas markets likely prefer hotter trends instead of cooler trends as it would portend a hot summer to come instead of slow to arrive.  The timing and theme to the 15-day forecast held with one last hot day over Texas Monday, then cooling as across the northern and central US fanning south and eastward.  This is a notable pattern change that will bring cooler than normal conditions to most areas east of the Rockies.  The result is stronger heating demand from the Midwest to Northeast, but also with less cooling demand from Texas to the Mid-Atlantic Coast to counter.
 
 

Monday’s Highs: Hot conditions over the Southwest into Texas for some early season cooling demand. There’s also slightly cool conditions across the Midwest and Northeast with highs of 40s and 50s for light llate season heating demand.

 

Cool conditions spread east of the Rockies this week.  This means stronger heating demand north but less cooling demand South and Southeast.


 

The mid-May pattern continues with late season cool shots east of the Rockies. This means continued slightly cool Midwest to Northeast but also not as hot from Texas to the Southeast.

 

8-15 Day Outlook: More of the same. Cool Northeast for this time of the year, but that also means less heat South and Southeast with near ideal 70s to 80s.

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