The weather has turned decidedly colder for a few days as an Arctic blast hits portions of the East Coast. This has resulted in acting as a floor in Nat Gas prices at the moment with a modest amount of short covering taking place. The latest NOAA weather forecast is changing a bit with a return to more normal temperatures over the eastern half of the US by mid-month with the central part of the US still expecting above normal temperatures. This has been enough to send some of the shorts to the sidelines in a market that has been modestly oversold.
This week the EIA will release the weekly Nat Gas inventory report on its regularly scheduled day and time...Thursday, January 5th. This week I am projecting a net withdrawal of 95 BCF which is modestly below both last year and the five year average for the same week. My projection for this week is based on yet another milder than normal weather pattern over most of the country. My withdrawal forecast is based on the fact that heating related demand declined a bit last week as parts of the country experienced mostly mild conditions. My projection will be below last year’s net withdrawal level of 135 BCF and below the normal five year average net withdrawal for the same week of 106 BCF. Bottom line the inventory surplus will build again in this report period.
Currently as a new day of trading gets underway in the US markets are lower.
Dominick A Chirichella
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