Frosty Conditions & Strong Demand West & Plains to Open the Week

Written by on October 26, 2020 in NatGasWeather - No comments

Monday, October 26:  The next several days should be exceptionally volatile due to expiration of Nov’20 Tue-Wed, and with the nat gas markets becoming extra sensitive to daily trends in LNG feedgas, weather, and production.  In addition, there’s a new tropical storm heading into the Gulf of Mexico with yet another track towards the US Gulf Coast, although currently expected to make landfall east of the Cameron and Sabine Pass LNG sites.  This storm is likely to again decrease Gulf of Mexico production by 1-1.5 Bcf, but also with potential disruptions to LNG cargoes arriving and departing.  Regarding the weekend weather data, a frigid early season polar front is currently sweeping across the Midwest, interior West, and Plains with rain, snow, and frosty lows of -0s to 30s, including 10s and 20s to north-central Texas.  The European and GFS weather models did gain numerous HDD’s/Bcf in demand for late this week on stronger cooling into the Northeast as this central finally arrives.  However, both the GFS and Euro maintained a solidly bearish US pattern for the first week of November with only limited amounts of cold air into the northern US.

Monday: Current temperatures caputed in the image this morning show frigid air over the interior West and Plains, including 20s into N. Texas. This will keep national nat gas demand strong today. The East remains rather warm for light demand with highs of 60s to 80s. But with frosty conditions over much of the rest of the US, demand will stay strong the next several days.

The pattern the next several days will bring a chilly weather system with rain and snow into the Plains and Midwest, while warm over the South & East.

Tropical cyclone Zeta will track towards the Gulf Coast the next few days, but currently favored to be east of both Sabine Pass and Cameron LNG sites.

Chilly highs of only 20s to 40s will continue mid-week as the central US cold shot is slow to eject.

While cold this week, the pattern for Nov 2-10 is currently forecast to be quite mild vs normal over most of the US. As such, the 8-15 day forecast has a bearish bias without notably colder trends.

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