As we discussed last week, the current pattern is quite a change from last week’s weather influenced energy demand. The east is in the midst of a cold week this week, and will see the heat switch staying ‘on’ for the next 6-8 days. HDDs for most eastern cities will be above both normal and last year for this stage in October. The outlook extending into next week will remain cold, and this will be supported by the shift to a negative trending NAO and AO. Despite the cold weather and an anticipation of OPEC production cuts, crude has softened further, with expectations of weakening demand weighing heavy among traders’ views. The strength of the US dollar (recent month rise of over 8%) is a contributing factor towards decreased overseas demand. The weekly pattern in natural gas, however, has diverged from oil and the last 5 days show an increasing slope; the current and extended cool pattern is providing support for NG futures, and traders should look for retracements as entry points for both NG and Heating Oil (NovJan). 

This entry was posted on Thursday, October 23rd, 2008 at 8:52 am and is filed under Energy, Global Weather, United States. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.