By: Heather Wine, Senior Risk Manager - Energy
4-Year price deciles Normal & Redistributed
Gas prices continue to post large daily swings amid shifts in the weather forecasts. Following Thursday’s rally, prices settled lower Friday as the ensuing arctic cold blast now may not last as long as forecasts had suggested. Weather models for the last few days of December trended warmer as the cold retreats. Jan futures settled 37 cents lower at $6.60.
The next 5 days will see arctic cold from the northwest through the central US. The 6-10 day period features strong below normal readings across the East while above normal temps begin filtering into the west.
A return to widespread above to much above normal temps is now forecast for the 11-15 day period. This change from Friday is pressuring the market this morning.
Colder temps drove demand higher over the weekend, with usage hitting 132.5 BCF on Sunday. Over the next week, demand will average 141.3 BCF/day. Consumption will ease back to an average of 116.1 BCF/day during the 8-14 day period.
Dry output fell to 96.8 BCF/day over the weekend but was offset by rising imports from Canada.
Another volatile opening to the new week of trade in the natural gas market as the spot January 23 contract has gapped lower by .325 and is currently down .450 trading near 6.150.
In last week’s trade, the January contract chopped in a fairly wide .886 weekly range alternating between 10 and 40 day moving average support near 6.200 and 200 day moving average resistance at the lower-7.000 area. For the week, the contract was up .355 closing Friday at 6.600.
Today’s gap lower open has dropped the January contract under 10 and 40 day moving average support at 6.260 (40 day average) and 6.300 (10 day average).
6.120-6.130 is near term support followed by the lower-5.700 area. Longer term support is the early-December low at 5.337.
The 10 and 40 day moving average as now resistance followed by the top of the gap created on Monday’s open at 6.575.
Relative Strength Index – 47.26
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