After climbing by 4.6 cents in the week's opening session to settle at $2.778/MMBtu, NYMEX April natural gas futures extended higher overnight ahead of the Tuesday, March 13, open, as revisions to temperature forecasts show stubborn cold expanding in scope. At 7:00 a.m. ET, the contract was 2.8 cents higher at $2.806/MMBtu.
Updated National Weather Service projections show below-average temperatures gripping the entire Northeast, most of the mid-Atlantic, parts of the Midwest and the bulk of the West in the six- to 10-day period, then enveloping almost all of the country's northern tier and a majority of the West in the eight- to 14-day period.
Average to above-average temperatures spanning the balance of the mid-Atlantic, a large area of the Midwest, the South and the fringes of the Southwest in the shorter-range view become confined to the edges of the Southwest, a small patch of the Midwest and the South in the extended period.
Despite the calendar arrival of the spring shoulder season in the coming weeks, lingering cold continues to inspire demand support, which will likely encourage ongoing storage erosion.
Recent natural gas storage withdrawals have run below the norm, with the latest inventory data from the U.S. Energy Information Administration detailing a 57-Bcf withdrawal for the week to March 2 that came in near consensus estimates and equal to the prior-year drawdown, but well below the 129-Bcf five-year-average draw. It left total working gas stocks at 1,625 Bcf, or 680 Bcf less than last year at this time and 300 Bcf below the five-year average of 1,925 Bcf.
Colder weather that drove up heating demand to start March, however, is expected to return storage draws to the low 100s Bcf when the next inventory report that will cover the week to March 9 is released on Thursday, March 15.
The EIA's latest "Natural Gas Weekly Update" for the week ended March 7, much of which will be reflected in the forthcoming storage report, shows a 2% week-over-week gain in total U.S. gas consumption led by a 10% increase in residential/commercial-sector demand attributed to a cooldown throughout much of the country.
The current end-of-withdrawal-season projection from the EIA sees working gas stocks reaching 1,402 Bcf by March 31, assuming storage draws match the five-year average for the remainder of the season. That would be 18% lower than the five-year average.
At the cash hubs, supportive demand forecasts encouraged the upside to prevail in price activity for natural gas booked Monday for Tuesday flow.
Looking at the key delivery locations, an almost 34-cent increase steered Transco Zone 6 NY next-day gas pricing to an index at $3.128/MMBtu, as a roughly 18-cent advance took PG&E Gate spot gas price action to an average at $2.887/MMBtu. An approximately 14-cent gain drove Chicago day-ahead gas price activity to an average at $2.639/MMBtu, as a near 7-cent uptick brought benchmark Henry Hub cash gas pricing to an index at $2.780/MMBtu.

In regional terms, Northeast spot gas price activity notched a roughly 26-cent gain in deals averaging at $2.977/MMBtu, as West Coast cash gas pricing tacked on 22 cents on the day to average at $2.245/MMBtu. Day-ahead gas price action in the Midwest rose by about 12 cents to an index at $2.534/MMBtu, while next-day gas prices in the Gulf producing region climbed by around 11 cents on average to an index at $2.723/MMBtu.

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