We sent out or newsletter to our subscribers May 23rd, when July natural gas prices were still at $3.40 MMBtu. Our forecast called for below normal temperatures mainly in the late month of June, limiting cooling demand. Our bearish “score” for natural gas reflected this forecast. Prices have fallen $0.30 MMBtu down to near $3.1 MMBtu since then, with our forecast verifying. The composite forecast for June given in the newsletter:
Climatech backs up our research
Our research combined current SSTs, statistical analysis of teleconnections and other boundary conditions to forecast the most likely scenario. In house, most Climatech composites matched this research, giving us more confidence in our forecast. Our Climatech subscribers saw these below normal temperatures for the eastern two-thirds, too. Unless something drastic occurs, it seems like it will verify nicely. The first part of June will likely be warm with a cool finish, but ample stocks of natural gas will probably prevent any major rally.
What’s the forecast for summer? There are signs of hotter July weather that may put a floor in prices, but for June we have a bearish stance.
Our newsletter and Climatech subscribers also know our forecast for the July and August. They will be watching intently to see if we go three for three and if natural gas reacts.
