Milder Trends Friday Carry Over Into the Weekend For Gap Lower

Written by on December 9, 2019 in NatGasWeather - No comments

Monday, December 9: Jan’20 nat gas futures dropped sharply Friday by 9¢, aided by the GFS model losing a hefty 30 HDD’s mid-day to fall better in line with the already milder European model. The weekend weather data trended further milder with the GFS losing another 25 HDD’s, while the European model lost 17 HDD’s. We mentioned going into Friday, the risk was the GFS was too cold and would lose demand in time, which it did. And now that the weather data trended further milder this weekend, prices gapped lower on the open.
 
Very light national demand will open the week as a warm ridge covers the southern and eastern US with highs of 50s to 80s, warmest over S. Texas and Florida. Upstream of this mild ridge is a frigid cold shot pushing into the N. Plains with very cold lows of -10s to 10s. Rain and snow will increase between this cold shot and the warm ridge over the East, making for a wintry mess across the Midwest and Ohio Valley the next few days. This frigid cold shot will sweep across the Great Lakes and Northeast mid-week to bring a surge in national demand. However, the amount of cold with this system isn’t as impressive as the data once showed and won’t advance as far into the southern US, leading to notable HDD losses going back to last week. Temperatures will warm back above normal across much of the US next weekend with highs of 50s to 70s returning for a swing back to very light national demand. The weekend weather data did maintain a chilly cool shot tracking across the US December 16-18th but far from cold with national HDD’s only slightly above normal. Where milder trends also occurred was Dec 19-22nd as mild high pressure expands across the eastern 2/3 of the US for light demand as the storm tracks shifts into the West and where the pattern looks most bearish. Overall, the weekend weather data for the next 15-days isn’t nearly cold enough to intimidate and will lead to bearish weather headwinds.
 

Monday: A strong cold shot will drop into the Midwest the next couple days with rain and snow out ahead of the cold front. While mild to warm Monday and Tuesday over the southern and eastern US for very light national demand, once cold air pushes into the East mid-week, national demand will surge to strong levels.


 

Lows with the cold shot will reach the -10s to 20s for strong demand, focused over the Midwest/Great Lakes.


 

Another swing back to mild national demand is expected this weekend as high pressure returns over much of the country besides the Northwest.


 

The overnight GFS model added some demand back but the European model trended further milder. The GFS has performed poorly the past few weeks so the markets likely not going to bite on anything colder the GFS might offer for a while.

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