History suggests that we normally see a double-digit delivery for today’s forthcoming EIA report (the 47th of the year), but this season is anything but normal. After an abnormally cold start to the season in October, this month has been a bust for gas bulls. For instance, heating degree days (HDDs) in Chicago were 31% below normal last week; in New York City HDDs were 37% below.
What’s more, with industrial and commercial demand lagging, odds are short we will see another injection (for the third week of November for crying out loud!) this morning.
The last time we saw an injection this late in the year occurred back in 2001.
More importantly, per the latest updates from the Fed, industrial and commercial demand will continue to underwhelm through this winter. Therefore, we need to see significant cold in the first quarter if we are going to see any significant reduction in the glut of gas.
Earlier this week, a prominent industry meteorologist reiterated their October forecast calling for a cold winter in the Eastern U.S. Unfortunately for the bulls, WSI is calling for warmer than normal temperatures this December, January and February in the North Central U.S., i.e. the largest residential gas market in the country. So, while awaiting a true seasonal indicator, here at we remain bearish on natural gas.
Stephen Schork is the Editor of, and has more than 17 years experience in physical commodity and derivatives trading, risk systems modeling and structured commodity finance.