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Bearish Weather Revision And Higher Production Data Drop Gas Prices

Jul. 03, 2017 3:01 PM ETUNG, UGAZF, DGAZ, BOIL, GAZ-OLD, KOLD, UNL, DCNG, GAZ15 Comments


  • The 6-10 day outlook turned bearish over the weekend, sparking the sell-off seen in natural gas.
  • Higher Lower 48 production also weighed on sentiment as production hit a YTD high.
  • Impact on storage, however, was a measly 5 Bcf.

Welcome to the weather edition of Natural Gas Daily!


There’s nothing like a nice gap lower or higher on a Monday morning. Weather models, primarily the euro (ECMWF), turned bearish in the 6-10 day outlook, while the 8-14 day outlook remained the same.

In addition to the bearish CDD revision, natural gas production over the weekend averaged above 72 Bcf/d and reached a YTD high of 72.5 Bcf/d!

Natural gas prices whipsawed throughout the trading day as the initial gap lower was quickly recovered after the ECMWF showed that the 8-14 day was revised higher, followed by another move lower by the end of the day as the 6-10 day outlook worsened in the afternoon update.

As for the impact on storage, we did not see the fundamental changes that justified the move lower. Our estimates for the next 4-weeks were revised higher, but only by 5 Bcf.

Power burn was also very strong throughout the weekend, and we expect total gas demand to increase further for the next several weeks.

For those interested in what the fundamental trends looked like in the first half, please see our weekly recap.

For those that are interested in natural gas daily fundamentals along with trader commentary, you should consider signing up for HFI Research.

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