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As soon as Goldman Sachs gets bullish on natural gas, new weather models are forecasting warmer weather trends for the next two weeks. As a result, NYMEX Henry Hub natgas February futures have plunged 5% Tuesday morning.
The plunge in natgas futures come on milder forecasts for the US, which means heating demand will wane over the next two weeks than previously expected.
"That decline came even though liquefied natural gas (LNG) exports remained near record levels and last week's storage draw was slightly bigger than expected," said Investing.com's Ajay Kedia.
Kedia said, "US natural gas production and demand will drop in 2021 as the economic fallout from coronavirus lockdowns continues."
Meteorologists at BAMWX expanded more on the new weather models that forecast warmer weather trends for the US through the end of the month.
They tweeted, "A look at what natgas was expecting FRI for week 2 vs the latest data rolled into the 5-12 day period. EPS lost 17 HDDs in that period GEFS lost 11.3 HDDs in that period BAM had to lower HDDs 3 points in that period (our FRI week 2 shown)."
From the Southwest to Mid-Atlantic, temps will be slightly above average through the end of the month.
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