Wednesday, November 06, 2019 at 4:31PM
Current weather forecasts are about as cold as you will ever see them at this time of the year, with lots of "blue" and even some "purple" showing up in our forecast maps from this morning. With that being the case, it is no wonder natural gas prices have been pushed much higher over the last couple of weeks, but for the first day in awhile, we saw hints that the level of cold in current forecasts could be reduced somewhat, hinted at by both today's GEFS and ECMWF ensemble (EPS). Both models show the potential to return to a "near normal" demand pattern in a couple of weeks, and natural gas prices took notice, selling off and closing with a red candle today, something that has been rare recently. At the end of the model runs, there is a tendency toward more of an upper level trough progressing toward the Gulf of Alaska, which typically correlates with milder trends in the U.S. The issue, however, is that we have seen models tease such a change a few times over the last week or two, only to fail, as forecasts progress colder. This definitely will promote some skepticism when it comes to any material shift in the pattern, for good reason. Is this time likely to be just another "head fake", or are they tangible reasons to believe a change is in the works? Sign up for a 10-day FREE trial here to see our latest thoughts, along with all of the products we have to offer to keep the active trader a step ahead of rapidly changing market conditions.