Natural gas prices were able to grind higher again today as we added GWDDs to our forecasts for next week.
This fit with our general expectations for the week; on Wednesday our Afternoon Premium Update highlighted that there was further upside for natural gas prices into the end of the week as we continued to add GWDDs to our 15-day forecasts.
The influence of these GWDD additions has been seen through the week on the continued rally in Z7/F8 as well, as expectations of near-term cold have supported the prompt month December natural gas contract the most.
Yet there were some long-range risks that had us concerned today that natural gas prices would not break out. We sent out a Text Alert this morning to clients warning that long-range warm risks in the forecast could help strengthen $2.98 resistance, which prices ended up settling right at for the week.
Heading into the weekend we see this dynamic continuing with limited long-term bullish risks, which are captured well in the Climate Prediction Center 8-14 Day forecasts shifting warmer.
This was partially covered in our Note of the Day and Pre-Close Updates for clients as well, which outlined our expectation for forecast shifts over the weekend and expected impacts on the natural gas market. One weekly model, the Japanese JMA, shows warm risks through Weeks 3 and 4 that would likely prove even more bearish for natural gas prices should they verify.
This was just one of the many images and models we broke down in our Note of the Day today, which correctly identified that prices would struggle to break out as we saw decent selling into the settle with some traders deciding against holding long into the weekend.
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