Thursday, January 02, 2020 at 12:53PM
The turn of the new year did nothing to stop the downward move in natural gas prices, with the prompt month February contract currently down nearly 6 cents as of this writing. It is not too difficult to see why when taking a look at the latest weather forecast maps. That is a lot of warmth at typically our coldest time of the year, not good if looking for above normal natural gas demand, as our forecast Gas-Weighted Degree Day (GWDD) chart shows relative to normal. It is for this reason that we alerted clients in our early morning report that risks to prices were still to the downside despite the already very low price environment, taking a "slightly bearish" stance for the day. This worked out well so far, as prompt month prices have fallen 5 cents since the report was issued. While weather wins at this time of the year, it is interesting that we still are seeing production at levels well under the high set in late November. This decline is keeping supply / demand balances tighter, which will become important if the weather is able to shift out of this very warm mode, even if only to a more "normal" background state. As such, it is still quite important to keep track of the latest trends. Our suite of products can help the active trader stay ahead of changing market conditions to capitalize on price moves. Sign up for a 10-day FREE trial here to take a closer look at what we have to offer.