trending Market Intelligence /marketintelligence/en/news-insights/trending/ej_ihfxeputxydir761vfq2 content esgSubNav
In This List

April natural gas futures end week's opening session with modest gain

Podcast

Next in Tech | Episode 49: Carbon reduction in cloud

Blog

Using ESG Analysis to Support a Sustainable Future

Research

US utility commissioners: Who they are and how they impact regulation

Blog

Q&A: Datacenters: Energy Hogs or Sustainability Helpers?


April natural gas futures end week's opening session with modest gain

April natural gas futures were little changed Monday, March 5. Caught between changing weather patterns that should drive near-term demand support but longer-range pressure, the contract moved on both sides of the ledger and settled 0.9 cent higher at $2.704/MMBtu.

Buying on the back of cold weather continues to meet with an increase in selling pressure as, despite cold weather in the midrange period, the market is taking note of the calendar and the higher low temperatures that the seasonal changes are expected to bring.

"Cold weather in March is nothing like cold weather in January and as such natural gas heating related demand will increase versus normal for this time of the year but it will not be near the levels of normal temperatures in January," Energy Management Institute principal Dominick Chirichella said.

Weather forecasts from the National Weather Service for the six- to 10-day period show below-average temperatures holding over the lower tier of the mid-Atlantic, nearly the entire Southeast, parts of the Gulf Coast, a few areas of the Midwest and Montana. Average to above-average temperatures will encompass the Northeast, the balance of the mid-Atlantic, Florida, much of the Midwest, most of the Gulf Coast and almost all of the West.

Below-average temperatures expand in scope to overtake the entire mid-Atlantic, Southeast, most of the Gulf Coast, more of Montana into North Dakota and much of the West Coast in the eight- to 14-day forecast, and average to above-average temperatures will span the Northeast, the Midwest, the remainder of the Gulf Coast and the balance of the West.

Despite the cold weather in forecasts, "Market participants have been skeptical in getting overly bullish when the temperature forecasts change, as the weather patterns have been relatively short lived throughout the winter heating season," Chirichella said.

Below-average temperatures have driven spikes in demand requiring larger amounts of natural gas to be pulled from inventories over recent weeks. The last couple of inventory withdrawals, however, have trailed the respective five-year averages. Inventories currently sit at 1,682 Bcf, or 680 Bcf below the year-ago level and 372 Bcf below the five-year average storage level of 2,054 Bcf, following the release of a 78-Bcf storage pull for the week to March 1 that was below the 118-Bcf five-year-average pull.

Early outlooks for the March 8 storage report that will cover the week ended March 2 span the upper 50s Bcf. At that level, the drawdown would again compare below the five-year-average withdrawal of 129 Bcf.

The natural gas inventory is forecast to reach the traditional end of withdrawal season March 31 at the second-lowest level since 2010, should weekly storage withdrawals match the five-year averages, the EIA said.

Market prices and included industry data are current as of the time of publication and are subject to change. For more detailed market data, including power, natural gas index prices, as well as forwards and futures, visit our Commodities pages.