From the CME (9:39 am EST):
Since trading with a $3/mmbtu handle on an intraday basis on Friday the spot Nat Gas futures contract has made a stellar recovery with prices now back into the $4.30/mmbtu to $4.50/mmbtu trading range after blowing right though the $4.20/mmbtu level. The recovery was led by yet another change in the short to medium term weather pattern to a more bullish forecast. With Nat Gas prices clearly in a weather driven mode any change in the weather forecasts will be immediately seen in the daily trading ranges especially with inventories expected to show a very high net withdrawal in this week's report.See also Jan. 9's:
As I mentioned yesterday the market gained upside momentum from a blog report by The Weather Centre suggesting February to be the coldest prolonged period of winter thus far. The polar vortex is likely to head south once again according to The Weather Centre. In addition the latest NOAA six to ten day and eight to fourteen day forecasts are a bit more supportive… especially the eight to fourteen day forecasts… than those issues last week.
In the longer forecast period the eastern half of the US is now expecting below normal temperatures for the period January 21st through January 27th. On the other hand the western half of the country is now expecting above normal temperatures offsetting some of the bullishness of colder weather heading to the eastern half of the country.
The short term direction of Nat Gas will be directly in the hands of the day to day weather forecasts. Whether or not the polar vortex is heading south in February is still a major question as I have not seen any other major weather service projecting this event. For now the market is buying into this forecast and will support prices until something changes in the medium term forecast.
This week I am projecting a strong net withdrawal of 285 BCF from inventory. My projection for this week is shown in the following table and is based on a week that experienced a modest level of significant below normal temperatures over major portions of the US. Bottom line the inventory deficit will widen modestly this week versus last year and the so called normal five year average if the actual numbers are in sync with my projections....MUCH MORE
Natural Gas: Price Collapses on EIA Numbers, Market Yawns at Next Week's Projected 300 Bcf Withdrawal Report and yesterday's "Natural Gas Futures Soar on Forecasts for Record Stockpile Drop".
Here is the forecast temperature, note the (lack of) temperature anomaly over 10282 (NYMEX zip):
