Natural Gas Futures lost some ground today. This is the first pull back in 6 trading sessions. Most of the recent support has been driven by expectations of higher heating demand due to below normal temperatures in the consuming regions. Nevertheless, current weather forecasts suggest that below normal temperatures will be a bit higher than previously expected. Likewise, long term forecasts are calling for a warmer than average first half of the winter. The National Weather Service models are showing above normal temperatures in the Midwest and Northeast. Long term forecasts are less reliable, but it is the best information available at this point. Price action will continue to be weather driven.
Nuclear outages total almost 16,000MW, which is higher than that of last year but close to the 5-year average. The last piece of fundamental worth mentioning, is that at current price levels, natural gas loses market share over coal for power generation.
Technically, we have tested $3.40/MMBtu support two times this week, and we are still in overbought territory.
Regarding the tropics, a low pressure system popped early this week in the Atlantic. Today the system was upgraded to a Tropical Depression; however, it poses no threat to operations in the Gulf.