Natural Gas Price Forecast - Update Oct 14

[dan_s]

Six weeks ago I forecast that natural gas in U.S. storage would be 3,250 Bcf on November 16, 600 Bcf below the 5-year average. The odds of hitting that number exactly are close to 0%, but the odds of storage peaking at 3,200 to 3,300 Bcf in mid-November are now over 80%. [Over the last 13 weeks (3 months) the build in storage had been 84 Bcf BELOW the 5-year average.]

This week (on Thursday) EIA will report the last large build of the refill season for the week ending October 12th. My guess is that it will be approximately 75 Bcf. There will be five more builds, but they will be smaller each week.

There is a mild El Nino building in the Central Pacific Ocean and the overall pattern is for a colder than normal winter in the Eastern 2/3rds of the U.S. Much colder weather than normal will spread across the U.S. this coming week.
The high in Dallas on Tuesday, October 16 is now expected to be 47F. See: http://myforecast.co/bin/expanded_forec ... tric=false

See December to February forecast here at the "Saturday Summary": https://www.weatherbell.com/premium/

Last winter we had gas in storage very close to the 5-year average. Just two weeks of colder than normal temperatures in December caused the January NYMEX contract to spike to $3.57/mcf. I believe a normal December will push the January NYMEX contract over $4.00/mcf by Christmas.

EIA has consistently under-estimate demand for U.S. natural gas this year. This is why we are approaching the peak demand period of the year with storage at an 8 year low.