2:38 PM · 20 November 2024

⏫NATGAS surges 5%

Contracts rallied significantly mid-week, with prices hitting $3.10/MMBTU, the highest since June. Interestingly, this comes just before the contract roll, which historically has seen prices decline in the 1-2 days leading up to the event. However, today's gains are fueled by a marked shift in US weather forecasts.

Forecasts point to a significant drop in temperatures at the turn of November and December, a stark contrast to the warmer forecasts issued just two days ago. Source: Bloomberg Finance LP

The number of heating degree days in the US has risen significantly above the 5-year average.

With prices up over 5% today, testing $3.10/MMBTU, the highest since June, and the roll set to occur after tomorrow's session, a sustained price at current levels could see post-roll prices open near $3.30/MMBTU - the highest since January. While seasonality suggests declines should start this week, worsening weather forecasts could drive prices further towards the $3.50-4.00/MMBTU range.


Source: xStation5

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