Taking the lead position from the April gas contract that rolled off the board in the prior session with a 7.9-cent gain at $3.175/MMBtu, NYMEX May natural gas futures had a weak showing overnight ahead of the Thursday, March 30, open, as the market succumbed anew to fundamental pressure. Changing hands from $3.187/MMBtu to $3.228/MMBtu, the fresh front-month contract was 4.0 cents lower at $3.191/MMBtu at 7:08 a.m. ET (1108 GMT).
Market participants are looking at what could be the season's last drawdown from natural gas stocks when the U.S. Energy Information Administration releases its next weekly storage report at 10:30 a.m. ET on Thursday, which will cover the week ended March 24.
Estimates for the forthcoming inventory data call for a storage draw of anywhere from 32 Bcf to 55 Bcf, with consensus formed at a 44-Bcf withdrawal. This would compare to a 27-Bcf five-year-average pull and the 19-Bcf drawdown seen in the corresponding week in 2016.
Total working gas stocks currently sit at 2,092 Bcf, or 399 Bcf below the year-ago level and 266 Bcf above the five-year average of 1,826 Bcf, following a 150-Bcf drawdown from stocks reported for the week to March 17.
A storage withdrawal at this week's consensus would leave overall inventories at a still-robust level of 2,048 Bcf, even as it would widen the year-on-year deficit to 424 Bcf and trim the year-on-five-year-average surplus to 249 Bcf.
Predominantly warmer weather in store is expected to sap heating demand ahead of a ramp up in cooling demand and should encourage a switchover from weekly storage draws to injections in the weeks ahead.
The latest National Weather Service forecast maps for the six- to 10-day and eight- to 14-day periods show above-average temperatures spanning the bulk of the country, leaving only small areas of the Northwest and Northeast in the scope of average temperatures in the near term, and just portions of the West in the grip of average to below-average temperatures further out.
At the cash markets, the price of natural gas booked Wednesday for Thursday flow predominantly favored the upside, as supportive demand expectations combined with gains at the futures arena.
Looking at the key delivery locations, gains of about 11 cents on average drove Transco Zone 6 NY and Chicago spot gas prices to indexes at $2.887/MMBtu and $3.032/MMBtu, respectively. An almost 9-cent increase steered benchmark Henry Hub next-day gas pricing to an index at $3.033/MMBtu, as a better-than-5-cent uptick took PG&E Gate hub action to an index at $3.201/MMBtu.
In regional terms, price activity for day-ahead natural gas was lifted by about 8 cents on average to indexes at $3.057/MMBtu in the Northeast, $2.843/MMBtu in the Midwest, $2.980/MMBtu on the Gulf Coast and $2.606/MMBtu on the West Coast.
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