Energy Prospectus

The warming trend is starting to wind down as colder than normal temperatures over a major portion of the eastern part of the US is likely to set in starting early next week. The latest NOAA forecasts are both more supportive for Nat Gas prices once again. The current weather is projected to experience above normal temperatures in the very short term over major Nat Gas heating related parts of the country. This warming pattern is likely to be short lived as the latest NOAA six to ten day and eight to fourteen day forecasts are projecting a return to below normal temperatures after the warm-up. Both forecasts are projecting below normal temperatures over the eastern half of the US for the period Nov 23rd to the end of the month. During this period there should be an above normal level of Nat Gas heating related consumption and thus an under performance in the weekly injections covering the same timeframe or possibly even the first net withdrawal of the season.

The spot Nat Gas futures price is now solidly above the $3.64/mmbtu resistance level and new support area. The next resistance level is at the $3.80/mmbtu level. With the weather expected to change as early as next week the market may settle into this new higher trading range for the next several weeks as the market digest the impact of colder temperatures on weather related Nat Gas demand.