Forecasts indicating significant warming cause gas prices to fall
Gas prices have lost almost all of the price jump that occurred at the opening of this week. Gas prices opened near $3.3/MMBTU at the beginning of this week, but today the upward gap was closed and prices are testing around $3.0/MMBTU. The gas price increase from the beginning of this week was related to quite substantial gas consumption in the USA. It cannot be ruled out that prices will again experience upward pressure when inventory data is published on Thursday. On the other hand, forecasts for the coming weeks indicate significantly higher temperatures than standard.
In the second half of December, temperatures should rise to levels higher than standard. Source: NOAA
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The number of heating degree days has dropped significantly in the USA, after a strong increase at the beginning of this month. This means that heating demand is decreasing. Source: Bloomberg Finance LP, XTB
The price is falling today to the level of $3/MMBTU and the gap that formed at the beginning of this week is being closed. Although seasonality indicates declines in the second part of December, a revival cannot be ruled out on Thursday when inventory data will be published. Gas consumption from recent days suggests that the decrease in inventories for the previous and current week may be slightly larger than standard. At the same time, it should be remembered that gas inventories in the USA are currently at 5-year highs, so there should be no concerns about excessive gas consumption during winter. Source: xStation5
