Natgas Futures Jump On Colder Weather Trends Over Next Ten Days
Natgas February Nymex contracts jumped 3.5% Monday morning due to colder weather trends and increased heating demand forecasted for the next ten days.
Bespoke Weather Services said since last week, weather models have shifted “materially colder” for parts of the US through mid-January.
“While the 15-day period as a whole remains solidly warmer than normal, we have chipped away at a good deal of the warmth, and it is important, in our view, to note that the colder changes are focused over the next eight to 10 days,” Bespoke said. “This signals risk that models toward mid-month and beyond could again be too warm.”
US Temapture deviations through mid-month show large swaths of the country, at times, will record colder than average temperatures.
Colder temperatures will increase energy demand to heat a structure, shown in the chart below:
With colder weather ahead, Refinitiv data estimates natgas demand, including exports, would rise from 121.1 billion cubic feet per day this week to 126.1 billion cubic feet per day next week.
Mon, 01/04/2021 – 13:25