Weather Models Begin Reversing Early Week Demand Losses

For the second week in a row, we began the week with a loss of forecast weather demand, as weekend models unanimously shifted warmer. By the middle of last week, however, a trend back colder had developed, ultimately gaining back all of the early week demand losses. Is this week set to repeat that exact same trend? It's possible. Last night's models posted demand gains when compared to 24-hours earlier.

Today's midday weather models maintained the overnight demand gains, and pose colder risks beyond the 15-day window as well. Here is the GEFS' depiction of the pattern in 15 days:

Notice the strong anomalous upper level ridge building back over Alaska, which would promote the transport of cold air southward into the United States.

We did expand the coverage of colder air in our official 11-15 day forecast this morning, although mostly in the western half of the nation as opposed to key populated areas important to natural gas usage.

All of this did allow natural gas prices to rise off their lows, with the prompt month December contract gaining nearly 5 cents on the day today.

The upcoming days are important, as a continued shift colder will certainly take prices higher, but with the fundamental picture very weak, failure of the pattern to deliver cold air can send prices down under the 2.50 level. As such, careful daily monitoring is a must.