GAZB - Natural Gas: Weather Models Turned Bullish. Therefore Wait For Higher Prices To Short The Market.
- Currently, we expect the EIA to report a draw of 192 bcf this week (a final estimate will be released on Wednesday).
- If the latest weather forecast remains unchanged, total natural gas demand should rise by as much as 12.4 bcf/d y-o-y (on average) over the next two weeks.
- However, there is a major disagreement between the model in terms of scale: GFS is less bullish than the ECMWF model.
- Fundamentally, February contract may rise above $2.773, but should probably stay below $2.820 per MMBtu.
- Thankfully, we have increased our long exposure on Friday (when March contract price dropped to $2.55 per MMBtu). However, we will probably take profit very soon and short the market.
For further details see:
Natural Gas: Weather Models Turned Bullish. Therefore, Wait For Higher Prices To Short The Market.