Cool Blasts To Continue Next Week

Written by on July 24, 2014 in NatGasWeather - No comments

Today’s Mid-Day Update



Mid-Day Update: The nat gas markets are up after the EIA reported a weekly build of 90 Bcf. This came in on the lower range of expectations. We thought the number would have to be quite bearish to warrant an immediate reaction for another leg lower. It will now be interesting to see if the big market players use the rally as an opportunity to again short the markets. The latest weather data continues to stream in and there are no significant changes showing up so far. Several weather systems will track into the central and eastern US over the next week with the impacts being most widespread during the middle of next week when very comfortable mid-summer temperatures push deep into the southern US. The markets know another couple big fat builds will be coming and when combined with next week’s cool blast will continue to provide bearish headwinds for a little longer. But the data continues to come around to our forecast of much warmer temperatures returning to the central and eastern US as the first week of August plays out. But the pattern will become a very sloppy one going into mid-August. What is of concern is we see enough weather and climate data to support the potential for additional cooler Canadian blasts to impact the northern US in mid-August. While bearish weather headwinds will ease over the next week, the longer term pattern is still not hot enough to be considered a bullish one. Therefore, we expect the strategy to be the same. Sell any significant rallies until proven otherwise. This is the first decent up day in a while and it will be interesting to see if it can sustain a bit more bullish momentum or whether prices drift back lower with much bigger than normal builds still to be released over the next two weeks.


Attached Images:
1) Next week’s cool blast will impact the greatest coverage of the US Wednesday. The image shows comfortable high temperatures pushing fairly deep into the southern US.


2) Weather pattern to start the second week of August is going to be a much warmer one, but still not quite ominous enough to put a scare in the markets or turn bearish weather headwinds bullish as cooler Canadian weather systems lurk.




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