Natural gas is back on the losing streak, after a week of four out of five declines, as forecasts predict milder weather over the most US regions.
Natural gas for delivery in January fell 1.58% to $3.742 per million British thermal units by 10:15 GMT. Prices held in a daily range between $3.785 and $3.727. The energy source increased 4.19% on Friday to $3.802.
According to NatGasWeather.com, natural gas demand in the US over the next seven days will be moderate, compared to normal, with a neutral trend for the December 14 – December 20 period.
Rain and snow showers will be brought over the Midwest by a new weather system, pushing temperatures below normal. The colder system will flow into the eastern US on Tuesday with heavy precipitation developing over the Northeast, where accumulations of snow are expected to form near the coastline.
High pressure will reign over the Southwest and central US, which will lead to above average readings. Milder temperatures are projected over the majority of the US by Thursday as a strong Pacific jet stream is expected to bring waves of milder weather systems moving across the country.
The moist pacific weather systems are expected to last until December 20, traveling through the country every few days. Each systems will bring periods of rain and snow, but overall it will keep temperatures warmer than normal in some regions and considerably above normal in most. However, colder Canadian weather patterns are expected to attempt a push towards the US after December 21, although it is unknown whether that push will be successful or not.
Temperatures
According to AccuWeather.com, temperatures in New York on December 9th will range between 40 and 44 degrees, compared to the average of 35-45, before reaching the above-seasonal 34-48 on December 14th. Chicago will see readings of 29-36 degrees on December 6th, before passing normal temperatures by 10 to reach 46 degrees on December 13th.
Down South, the high in Texas City on December 9th will be 66 degrees, in line with the usual, before slightly increasing to 57-70 degrees on December 14th. On the West Coast, today’s temperature in Los Angeles will peak at 76 degrees, 10 above normal, before readings moderate to seasonal 69 degrees on December 14th.
Supplies
The Energy Information Administration reported on Thursday that US natural gas inventories slid by 22 billion cubic feet in the week ended November 28th, below analysts’ projections ranging between 30 and 50 billion cubic feet. It was also beneath the five-year average gain of 50 bcf and last year’s decline of 141 bcf during the comparable period.
Total gas held in US storage hubs stood at 3.410 trillion cubic feet as of November 28th, narrowing its deficit to the five-year average of 3.782 trillion to 9.8% from 10.4% during the preceding seven days. Stockpiles were also 6.2% below the year-ago level of 3.637 trillion cubic feet.
The East Region saw a net withdrawal of 34 bcf to 1.830 trillion and was 9.1% below the five-year average, while inventories at the West Region rose by 1 bcf to 478 bcf and were 8.4% behind average levels. Stockpiles in the Producing Region rose by 11 bcf to 1.102 trillion, trailing the average by 11.6%.
Pivot Points
According to Binary Tribune’s daily analysis, January natural gas futures’ central pivot point stands at $3.763. In case the contract penetrates the first resistance level at $3.863 per million British thermal units, it will encounter next resistance at $3.923. If breached, upside movement may attempt to advance to $4.023 per mBtu.
If the energy source drops below its first support level at $3.703 per mBtu, it will next see support at $3.603. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $3.543 per mBtu.
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