Monday Afternoon Pattern Update

Written by on December 30, 2013 in NatGasWeather - No comments

Tricky Mid-January Pattern Change Still Expected

 
We were hoping the latest suite of meteorological data would help add insight to how the mid-January pattern would play out. Unfortunately, the latest data is again quite a bit different from yesterdays output, leading to lower than normal confidence. We have been saying that the pattern would be tricky and how it plays out will be dependent on what happens to cold air trying to back off the western Canada coast early in week 2. This mornings forecast data again only pushes the cold air modestly off the coast (image 1). This allows some ridging to develop over the Plains, but it’s not enough to bring a significant warm up to the central and eastern US. If this were to play out, cold air would be allowed to remain over much of the northern US, which would likely be viewed as bullish to the nat gas and heating markets.  However, there is so much uncertainty that it would be dangerous to say with high confidence which way it is going to play out (image 2).  Sometimes, weather patterns are very unstable and it’s better to not try and fight data that is contradictory which could lead to being put in a risky position.  The third image really highlights just how challenging the pattern is and if you get caught on the wrong side of the forecast you could potentially be putting yourself in a fast moving market that goes against you.  Of interest is how much different the forecast solution are with where regions of very warm and cold air is located, which is all dependent on how the western Canada cold plays out.   The latest data hasn’t changed our forecast perspective, which is the market will be supported until warmer forecasts look more certain for the central and eastern US.  With the latest data again starting to trend toward colder conditions for the northern US for mid-January, we see no reason yet for a significant, prolonged sell off and big players will continue to buy dips.

 

 

Here is one of the latest forecast maps from Monday mornings data. After the first week of January plays out, cold air will try to backdoor off the Pac NW coast. The latest data shows it will push somewhat off the coast, but not quite enough to buckle the flow and allow a ridge to build into the central US. This pattern would allow cold Canadian air to hover across the northern US, which would lead to near or above normal nat gas and heating demand for many of the highest demand states.  But the forecast data is still struggling on how this will play out.

Here is one of the latest forecast maps from Monday mornings data. After the first week of January plays out, cold air will try to backdoor off the western Canada coast. The latest data shows it will push somewhat off the coast, but not quite enough to buckle the flow and allow a ridge to build into the central US. This pattern would allow cold Canadian air to hover across the northern US, which would lead to near or above normal nat gas and heating demand for many of the highest demand states. But the forecast data is still struggling on how this will play out.  A strong jet stream into the US that would be maintained for some time will not occur unless enough cold air can set up off the coast.  This pattern shows there is some colder air off the Pac NW to bring in some storms but not quite enough to keep it going.

 

The latest forecast data came in between the two ends of the pattern spectrum.  By January 10th some of the forecast data has been saying it would play out like the pattern on the left where cold air has a difficult time pushing off the coast and ends up sweeping into the central and eastern US for cold conditions continiuing.  The pattern on the right is where the cold air pushes off the coast more effectively and allows a ridge to build into the central and eastern US.

The latest forecast data came in between the two ends of the pattern spectrum. By January 10th some of the forecast data has been saying it would play out like the pattern on the left where cold air has a difficult time pushing off the coast and ends up sweeping into the central and eastern US for cold conditions continuing. The pattern on the right is where the cold air pushes off the coast more effectively and allows a ridge to build into the central and eastern US for a warming trend.  The latest data isn’t much help since it splits the two, which may end up being the way it plays out, but because the solutions are quite a bit different from just this morning data, confidence is low on how this will play out.

 

The Sunday Night forecast data didn't help much as the forecast models continue to stuggle mightily on what will happen the second week of January.  The image shows potential scenarios for January 10 on where the warm and cold anomalies will be located.  Each scenario is totally different.  The upper left show what would happen if cold air backs off the western Canada coast.  A strong ridge would pump into the central and eastern US for a huge warm up.  The lower left shows what would happen if the cold does not push offshore and instead sweeps into the central and eastern US.  A very cold pattern which would be sure to give the nat gas markets a huge bullish surprise.  The other two on the right are some combination of both of them.

The Sunday Night suite of meteorological data didn’t help much as the forecast models continue to struggle mightily on what will happen the second week of January. The image shows potential scenarios for January 10th on where the warm and cold anomalies will be located. Each scenario is totally different. The upper left shows what would happen if cold air backs off the western Canada coast. A strong ridge would then pump into the central and eastern US for a huge warm up. The lower left shows what would happen if the cold does not push offshore and instead sweeps into the central and eastern US.  This would result in a very cold pattern which would be sure to give the nat gas markets a huge bullish surprise. The other two on the right are some combinations of both of them.

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