Is the Weather Trade Losing Its Grip?

Prices ran hot last week on colder outlooks and anticipation of hefty draws in the next three EIA storage reports. But over the weekend, the European (EC) weather model shifted notably warmer for the 8–15 day period, blunting the bullish narrative. The GFS model still leans colder, but even that has moderated.

That’s not what bulls wanted to see. Traders betting on sustained winter demand were leaning heavily on those extended forecasts to keep the rally going. Instead, the shift back toward seasonal or above-average temps later this month throws cold water on the idea of a sustained push above $5.50.

Storage Draws Begin, But Bulls Want Bigger Numbers

Last week’s EIA report showed a 12 Bcf draw — modest, but expected for the week ending Nov 28. Total stocks now sit at 3,923 Bcf, still 191 Bcf above the five-year average. With three bigger draws on deck due to this week’s frigid system sweeping across the northern U.S., bulls are counting on storage to tighten quickly.

But positioning is tricky here. The market wants to price in those stronger withdrawals — and there’s a decent case for it — but if weather models continue to lean mild into late December, the risk is that even strong EIA prints get faded. Especially if buyers start questioning how long the cold sticks around.

Traders Watching Support Levels and Forecasts Like a Hawk

Technically, the retreat from $5.496 isn’t just profit-taking — it’s a sentiment shift. The 50% retracement at $4.953 is being tested right now, and it’s a line in the sand. A clean break could trigger momentum selling toward $4.73. On the flip side, if models trend back colder and $4.953 holds, dip buyers may re-emerge.

Bottom line: the weather premium is under review. Models have turned against the bulls for now, and the price action reflects that. If we get another round of milder updates, the selloff likely deepens. But if the cold snaps back into the 8–15 day window, traders could chase another leg higher.