Natural gas futures gapped lower early Monday, which means the weather forecasts over the weekend came in on the seasonal-to-warm side.
The move wasnt much of a surprise after the midday run of the American weather model dropped a huge amount of demand from its long-range forecast, and the late European model held firm in its milder stance.
Nonetheless, there was still too much uncertainty ahead of the weekend for undercapitalized traders to take an aggressive position ahead of the new forecasts. The gap lower opening suggests some decided to chase the news lower, and some aggressive counter-trend buyers were forced to sell at sharply lower levels.
At 04:27 GMT,January natural gasfutures are trading $2.230, down $0.104 or -4.46%.
Latest Weather Outlook
In its midday Friday run, the Global Forecast System (GFS) moved decidedly lower, shedding a hefty 30 heating degree days (HDD) from its forecast. The American GFS still advertises a strong cold shot into the northern United States for the middle of the week, but it locked onto a milder break for December 13-15 and also wasnt as cold across the northern United States December 17-20, NatGasWeather said.
This article was written by James Heyrczyk, for the full article: