Natural gas futures finished higher on Tuesday on profit-taking and aggressive counter-trend buying. Some traders said the return of demand to the weather forecasts was the catalyst behind the market’s strength.

The market gapped lower at the start of the week as weekend forecasts showed “big demand losses”, but as of Tuesday afternoon the last few model runs had added to demand expectations over the 15-day outlook period, according to Bespoke Weather Services.

Even so, “the pattern still averages below normal in terms of demand over the next couple of weeks,” Bespoke said. “We just appear to be finding the potential for a few colder days to mix in the background milder state.”

“…When could we see a meaningful turn back colder? We feel the next shot falls sometime around the turn of the new year, as that appears to be when tropical forcing may become more favorable for shaping the pattern in a way that can deliver cold into the U.S. once again.”

Short-Term Weather Outlook

According to NatGasWeather for December 10-16, “A strong cold shot will sweep across the Midwest and Northeast the next couple days with chilly lows of -20s to 20s for strong demand. Rain and snow will continue along the cold front as it pushes into the East, while heavier rains will occur with a second system tracking into Texas and the South with heavy showers, although only slightly cool versus normal with highs of 40s and 50s. High pressure will quickly build across the US Friday through Saturday with highs of 40s to 70s returning for a swing back to light national demand, although increasing again early next week as cool air returns across many regions of the US.”

Daily Forecast