Weekend Weather Data Warmer Jan 25-28 but Much Colder Jan 29-Feb 5
January 23, 2023: While the weekend weather data trended warmer Jan 26-28 by delaying cold air over the Midwest from advancing eastward, the data trended sharply colder Jan 29-Feb 5 with below normal temperatures setting up over most of the US for strong national demand. Much of the data still favors a milder pattern slowly returning Feb 6-8 for easing demand, although subject to large changes that far out. Essentially, the weather data delayed a colder pattern 1-2 days but then extended it a full 3-4 days longer. Statistically, the GFS trended 13 HDDs colder compared to Friday’s midday data, but the EC trended more impressive 20 HDDs colder. Both forecast light to moderate demand the next 6-days, strong demand Jan 29-Feb 5, then with demand slowly moderating Feb 6-8 as subfreezing air retreats to near the Canadian border but with changes likely.
Strong volatility is expected to continue this week, but likely to trade higher Monday after colder weekend trends. Also of interest will be if US production remains strong at 99-101 Bcf, as well is if there’s an update this week to when Freeport LNG will resume operations since they are looking to be further delayed into Feb or March. In addition, expiration of Feb’23 contracts are upcoming, and players are likely to be repositioning in the days ahead. Bigger picture, this week’s EIA report is expected to print a draw of only -70s-80s Bcf, nearly 100 Bcf lighter than the 5-year average, increasing surpluses to near +135 Bcf. Next week’s EIA report will be factoring a relatively mild pattern this week to increase surpluses over +150 Bcf. However, a frosty US pattern Jan 29-Feb 5 will finally bring stronger than normal demand.