Natural gas declines on mild US weather outlook

Natural gas fell on Monday as weather forecasts called for a period of milder conditions over many densely-populated US areas.

On the New York Mercantile Exchange, natural gas for delivery in February declined by 1.17% to trade at $4.277 per million British thermal units by 10:20 GMT. Prices hit a session high at $4.279 per mBtu, while day’s low was touched at $4.237 per mBtu.

Last week, the energy source surged by 5.4%, after losing 5.7% in the previous 5-day period. Prices settled last year 26% higher, the best performance since 2005 and second straight annual advance.

Short-term weather outlook

NatGasWeather.com reported on January 19th that weather will be relatively quiet on Monday across much of the US, because this is a period in between reinforcing shots of cold air. The next cold blast will probably cross through the Midwest Monday afternoon and is expected to push deep into the Southeast. Another cold blast may follow on Wednesday into Thursday and will most probably push much deeper into the southern Plains, bringing freezing temperatures as far as northern Texas. However, only localized areas of light snowfall are predicted for the period through January 26th. According to the website, during the observed period, moderate to high natural gas and heating demand can be expected. 

Extended weather forecast

NatGasWeather.coms extended forecast called that the potential for a very cold air mass to push deep into central US around January 26-27th has minimized. A big pattern change is expected during the last few days of January as a much more active jet stream is expected to impact the West coast. The latter will limit the amount of very cold air that is able to push into the central US and will thus ease natural gas demand, by limiting the regions which will experience below-normal temperatures to the Midwest, Mid-Atlantic, and Northeast. 

By the end of the month, a west to east flow will probably set up across the US, bringing fairly active weather pattern, with numerous winter storms impacting much of the country. On one hand, there will still be areas of moderate to heavy rains and snows, while on the other hand it will be a bit milder for the central and eastern US.

According to AccuWeather.com, temperatures in Boston on January 29th may bottom at 27 degrees Fahrenheit, 5 above average, while the low in Chicago may hit 25 degrees, above the average of 18 degrees. Temperatures in Indianapolis are expected to reach 29 degrees Fahrenheit, 8 above normal.