El Niño Conditions Depress US Heating Demand, Prompting Volatility Warnings
What happened
El Niño conditions are depressing heating demand across the Lower 48, causing the November natural gas futures contract to fall 5.6% on Friday. This marks a 15% weekly loss for the contract. Goldman Sachs issued warnings regarding price volatility in the market.
From zerohedge.com
Why it matters
Above-average temperatures through the end of the month and into early November are reinforcing expectations for a mild winter, which reduces the need for heating fuel. This trend is impacting natural gas futures, while global supply fears are simultaneously driving high prices in Europe.
From zerohedge.com
Who's involved
- Goldman SachsIssued a warning regarding price volatility in the commodities market.
- NatGASIs subject to depressed heating demand due to warmer weather trends.
- El NiñoThe climate pattern driving warmer weather and depressed heating demand.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- NatGASSpeculative
Natural Gas might see reduced consumption and lower futures prices due to depressed heating demand.
- Goldman SachsSpeculative
Goldman Sachs could see its commodities trading and advisory business impacted by market volatility.
- EuropeSpeculative
Europe might experience high TTF price spikes due to global supply fears and El Niño dynamics.
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The entities involved
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NatGAS
German company
Nothing else this week.
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Goldman Sachs
American investment bank
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El Niño
Spanish rap artist