Natural Gas: Forecasts For Arctic Blast In U.S. Set To Ensure Winter Peak
Last Thursday, despite reporting of a higher withdrawal of -268 Bcf, natural gas futures witnessed a selling spree, increasing deficits of -25 Bcf to 143 Bcf, much larger than the 5-year average of -150 Bcf.
A frigid Arctic blast to the US’ interior has been influencing price action since Friday, with lows of -10s to 20s, including 0s and 20s over much of Texas and, which could continue through the weekend.
The overall scenario looked evident enough to keep the demand for natural gas on the higher side during the upcoming week. However, weather data has been trending warmer for the next week. Temperatures are also forecast to be not quite as cold with frosty air returning to the US Feb. 13 -17.
Natural gas March contracts’ weekly closing level of $4.550 supports the advent of an uptrend, just as NG futures witnessed during February 2014.
Undoubtedly, the uptrend started from the same level on Feb. 11, 2014, and continued to move upward peaking at 6.276 on Feb. 19, 2014. After sustaining price above $4.886 on Feb. 20-21, NG futures tested a new high at $6.491 before sliding downward.
Undoubtedly, the higher volatility could continue to follow every directional move but, the overall trend could remain upward due to frosty weather during February 2022. The Arctic front will gradually advance into the East while fizzling in strength, but still impressively cold and with areas of rain and snow. A mild break, however, is forecast for much of the US Tue-Fri of next week.