Natural gas increased for a third time this week on Friday, despite bearish EIA report, as forecasts predict Cold Canadian air will flow into the US.
Natural gas for delivery in January gained 1.62% to $3.693 per million British thermal units by 9:55 GMT. Prices held in a daily range between $3.775 and $3.614. The energy source lost 1.48% on Thursday to $3.634. Regardless of the three day increases, natural gas is headed to a weekly decline.
According to NatGasWeather.com, natural gas demand in the US over the next seven days will be moderate to low, versus normal, with a neutral, but becoming slightly colder trend for the December 19 – December 25 period.
The strong Pacific jet stream will maintain its presence over the western US, with heavy rain showers and snow. The weather system will flow through the Southwest and set up in Texas by Sunday, with even heavier rains and slightly colder temperatures.
Rain and snow showers are also expected over the the Northeast on Saturday, but much more rarely. The central and eastern US will enjoy above normal temperatures over the weekend, until the weather system from Texas moves into the region and combines with a colder blast of northern Canadian air, resulting in seasonal temperatures over the Great Lakes and the Northeast.
Moist Pacific weather systems will continue to travel through the US every other day. Those systems will be quite mild at first, pushing temperatures above the normal over the majority of the country, but the they will gradually trend colder after December 22.
Temperatures will slowly turn colder as Canadian air moves into the northern US, although it is still early to estimate exactly how cold it will be and how deep it will reach within US territory.
Temperatures
According to AccuWeather.com, temperatures in New York on December 13th will range between 30 and 38 degrees, below the average of 33-44, before reaching the seasonal 32-44 on December 17th. Chicago will see readings of 39-41 degrees on December 13th, 5 above normal, before slightly moderating to 32-37 on December 18th.
Down South, the high in Texas City on December 13th will be 70 degrees, 6 above usual, before falling to 44-62 degrees on December 19th. On the West Coast, today’s temperature in Los Angeles will peak at seasonal 64 degrees, with expectation temperatures to range between 64-68 degrees through December 19th.
Supplies
The Energy Information Administration reported on Thursday that US natural gas inventories slid by 51 billion cubic feet in the week ended December 5th, slightly above analysts’ projections ranging between 40 and 50 billion cubic feet. It was beneath last year’s decline of 186 bcf during the comparable period.
Total gas held in US storage hubs stood at 3.359 trillion cubic feet as of December 5th, narrowing its deficit to the five-year average of 3.710 trillion to 9.5% from 9.8% during the preceding seven days. Stockpiles were also 5.2% below the year-ago level of 3.545 trillion cubic feet.
The East Region saw a net withdrawal of 50 bcf to 1.780 trillion and was 9.7% below the five-year average, while inventories at the West Region declined by 8 bcf to 470 bcf and were 7.7% behind average levels. Stockpiles in the Producing Region rose by 7 bcf to 1.109 trillion, below the five-year average by 9.8%.
Pivot Points
According to Binary Tribune’s daily analysis, January natural gas futures’ central pivot point stands at $3.674. In case the contract penetrates the first resistance level at $3.735 per million British thermal units, it will encounter next resistance at $3.835. If breached, upside movement may attempt to advance to $3.896 per mBtu.
If the energy source drops below its first support level at $3.574 per mBtu, it will next see support at $3.513. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $3.413 per mBtu.
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