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April natural gas resumes losses ahead of official start of spring

April natural gas futures on the New York Mercantile Exchange turned lower after posting early gains Monday, March 19. The contract settled 3.7 cents lower at $2.651/MMBtu while trading from $2.640/MMBtu to $2.710/MMBtu.

The market was pressured by weather, with imminent warming beyond the official start of spring March 20.

The latest six- to 10-day weather map from the National Weather Service shows below-average temperatures in the Northeast and mid-Atlantic expanding from the West to encompass a portion of the north-central U.S. Average temperatures grip portions of the Southeast, Midwest and central U.S., while portions of the Southeast, the Gulf and areas of the south-central U.S. will see above-average temperatures.

For the eight- to 14-day period, below-average temperatures grip the majority of the country with lingering cold in the Northeast, mid-Atlantic and across the majority of the central U.S. and a portion of the West. A mix of average and above-average temperatures grip the Southeast, a portion of the Midwest, the Gulf and the West.

Longer-range forecasts updated March 15 by the National Oceanic and Atmospheric Administration for April through June show higher-than-normal temperatures for much of the country, with the exception of the Pacific Northwest and the north-central U.S., which generally should see equal chances of below-average, normal or above-average temperatures through the three months.

Weekly natural gas storage reports should turn from outlining weekly withdrawals to weekly injections with the onset of milder weather that should sap demand for heating ahead of a bump up in cooling demand.

Ahead of the warming and the onset of the injection season, storage withdrawals are expected to continue over the next few weeks as cold weather continues to hold sway over demand.

Natural gas inventories fell 93 Bcf in the week to March 9, a step above the 57-Bcf pull reported the previous week and above the 55-Bcf year-ago withdrawal but below both the full range of estimates ahead of the report's March 15 release and the 97-Bcf five-year average.

With colder conditions felt in many parts of the Lower 48, total U.S. consumption of natural gas rose 5% in the week to March 14 compared with the previous week, according to the U.S. Energy Information Administration. The additional demand is feeding outlooks for a mid-90s Bcf withdrawal from stocks for the week to March 16 that will compare with a 137-Bcf pull reported for the corresponding week in 2017 and the 53-Bcf five-year average draw.

If net withdrawals from working gas stocks match the five-year average for the remainder of the withdrawal season, working gas stocks will total 1,406 Bcf by March 31, which is considered the traditional end of the season. That would be 17% lower than the five-year average.

Working gas stocks ended the 2013-2014 heating season at 837 Bcf, which is the lowest reported level for that time since 2010.

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.