Natural gas rose on Wednesday, regaining some of yesterdays losses, as weather agencies predict colder temperatures through December, especially over the north-central and eastern US.
On the New York Mercantile Exchange, natural gas for delivery in January rose 0.91% to $3.652 per million British thermal units by 11:53 GMT, having shifted in a daily range between $3.668 and $3.614 per mBtu. The energy source settled 2.69% lower at $3.619 on Tuesday, but not before it dropped to $3.605, the lowest since December 8th.
According to NatGasWeather.com, US natural gas demand will be moderate, compared to normal, through December 22nd, with a colder weather trend for the following seven days.
The eastern US will continue to experience periods of rain and snow today. The far southern US will maintain its mild state with readings around 55-65 degrees Fahrenheit. A number of Pacific weather systems will flow over California and the Southwest during the next couple of days, bringing rain and snow over the areas, and will eventually reach Texas and the South by Friday.
Early next week colder Canadian weather systems will arrive into the northern US, carrying below normal temperatures, snow and rain, NatGasWeather.com reported.
Around next Wednesday a strong weather system will flow into the central and eastern US, with areas of rain and snow accumulations, although it is still unknown how much cold Canadian air would be released from this weather system.
Through the end of December a couple of similar weather systems are expected to hit the north-central and eastern US. Meanwhile, the West Coast will enjoy above-seasonal temperatures due to high pressure reigning over the region. However, the interior West may turn chilly as Canadian air flows through.
Temperatures
According to AccuWeather.com, temperatures in New York on Thursday will range between 35 and 44 degrees Fahrenheit, above the average of 31-42, before climbing to 37-49 degrees on December 23rd. Chicago will see lows drop to 27 degrees on December 19th, 5 above usual, and is expected to remain mostly seasonal or a bit warmer through December 26th.
Down South, Texas City will enjoy above-seasonal temperatures tomorrow ranging between 62 and 71 degrees, with no major trend shifts expected until December 27th when readings will moderate to seasonal for the rest of the mouth. On the West Coast, the high in Los Angeles on December 18th will be 64 degrees, 3 beneath the average. Temperatures will warm up to 76 degrees on December 24th before easing to seasonal levels through the rest of December.
Supplies
The Energy Information Administration reported on Thursday that US natural gas stockpiles slid by 51 billion cubic feet in the week ended December 5th, exceeding analysts’ estimates for a drop of 45 billion cubic feet but also trailing the five-year average withdrawal of 71 bcf.
Total gas held in US storage hubs stood at 3.359 trillion cubic feet which was 5.2% below last year’s 3.545 trillion and narrowed its deficit to five-year average levels to 9.5% from 9.8% during the preceding week.
Due to last week’s mild weather, EIA’s next report, due this Thursday, is expected to show a significantly smaller draw of around 55-60 bcf compared to the the five-year average, which would help further trim deficits. However, the likely bearish stockpiles report might be overshadowed by bullish weather data, given the cold blasts that are projected to arrive to the northern US next week.
Pivot Points
According to Binary Tribune’s daily analysis, January natural gas futures’ central pivot point stands at $3.671. In case the contract penetrates the first resistance level at $3.737 per million British thermal units, it will encounter next resistance at $3.855. If breached, upside movement may attempt to advance to $3.921 per mBtu.
If the energy source drops below its first support level at $3.553 per mBtu, it will next see support at $3.487. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $3.369 per mBtu.
In weekly terms, the central pivot point is at $3.735. The three key resistance levels are as follows: R1 – $3.885, R2 – $3.976, R3 – $4.126. The three key support levels are: S1 – $3.644, S2 – $3.494, S3 – $3.403.
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