Goldman Sachs maintains a bearish outlook on natural gas despite forecasts of a colder winter, as current warm weather suppresses demand and prices.
Mild weather across the Lower 48 has capped natural gas demand, keeping futures locked in a bearish sideways trend, unable to breach the $3 per million British thermal units level. Goldman's Thomas Evans published a note on Monday about the US NatGas market, pointing out that October's unusually warm weather in the Lower 48 has led to the third-lowest Heating Degree Days HDDs for October since 1963.
wrote that November-March will be 7% colder than last year. Based on more frigid temperatures, the group projects around a 14% increase in residential and commercial demand and a 7% increase in industrial demand. NatGas futures trading in New York has been range-bound for nearly two years, primarily because of lower demand and abundant NatGas supplies. The latest data from Bloomberg shows that the average temperatures for the Lower 48 are sliding down the 30-year trend line. Winter is ahead.
Commodities Goldman Sachs Energy Market Weather Forecasts Futures Trading Heating Degree Days EIA NGSA Lower 48
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