April natural gas backed off an early high of $2.811/MMBtu to settle only slightly stronger on the day Tuesday, March 13, as support from the weather was exhausted. April natural gas futures on the New York Mercantile Exchange closed 0.8 cent higher at $2.786/MMBtu.
Below-average temperatures are forecast to grip the Northeast, mid-Atlantic, a portion of the Southeast, a large segment of the north-central U.S. and all of the West through the six- to 10-day period and then expand to include the entire northern tier of the country, leaving the southern tier mixed, with average and above-average temperatures in the east and central U.S. and below-average temperatures in the West in the eight- to 14-day period.
The increased weather-related demand is expected to support a return to a rapid pace of storage erosion following a recent slowdown that culminated with the 57-Bcf drawdown reported for the week to March 2 that was on par with the corresponding week in 2017 but was well below the 129-Bcf five-year-average pull.
The U.S. Energy Information Administration's latest "Natural Gas Weekly Update" for the week ended March 7 reflects 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 uptick in demand is expected to drive storage withdrawals back to the low 100s Bcf when the next inventory report that will cover the week to March 9 is released Thursday, March 15.
Total working gas stocks currently stand 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. A withdrawal from stocks in the low 100s Bcf would widen the deficits amid comparisons to a 97-Bcf five-year-average withdrawal and a 55-Bcf pull reported for the corresponding week in 2017.
The EIA said that if net withdrawals from working gas stocks match the five-year average for the remainder of the withdrawal season, working gas stocks will total 1,402 Bcf by March 31, the traditional end of the season. That would be 18% lower than the five-year average.
Working gas stocks ended the 2013-14 heating season at 837 Bcf, which is the lowest-reported level for that time.
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