After ending 2.4 cents softer at $2.732/MMBtu ahead of the weekend, NYMEX April natural gas futures ticked higher overnight leading up to the Monday, March 12, open, on the back of demand support associated with recent and anticipated late-season cold. At 7:20 a.m. ETm the contract was 1.5 cents higher at $2.747/MMBtu.
Colder weather bolstered heating demand to start March. 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.
An 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 on Thursday, March 15, signaling a step higher in the rate of stock erosion.
In its latest storage data for the week ended March 2, the EIA outlined a modest 57-Bcf withdrawal that came in near the average anticipated 58-Bcf pull 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. Weather during the storage report week generated fewer heating degree days than historical averages.
Stubborn cold indicated across major heat-consuming regions in midrange projections should keep demand buoyed in the weeks ahead, but higher low temperatures implied by the changeover from the winter heating season to the spring shoulder period looks to contain any weather-related demand support suggested by forecasts.
The National Weather Service sees below-average temperatures holding over most of the Northeast, a small area of the Midwest and nearly the entire West in the six- to 10-day period, then expanding to encompass all of the Northeast, much of the Mid-Atlantic and a majority of the Midwest in the eight- to 14-day period.
Average to above-average temperatures initially stretch from the fringes of the Southwest into the bulk of the central and eastern U.S., but eventually shrink in scope to be contained to the balance of the Mid-Atlantic, lower tier of the Midwest, the South and edges of the Southwest.
Downside risks remain viable, however, as moderating weather conditions implied by the calendar could sap lingering heating demand.
The natural gas offering booked March 9 for Saturday-through-Monday flow had a predominantly weak showing amid pressure from the typical weekend inclusion in the revised package.
Among the key delivery locations, PG&E Gate spot gas prices led the downtrend with a 10-cent decline on average to an index at $2.704/MMBtu. Benchmark Henry Hub day-ahead gas pricing followed with an almost 7-cent decrease in transactions averaging at $2.712/MMBtu, then Chicago hub activity that unraveled about 6 cents on the day to average at $2.501/MMBtu and Transco Zone 6 NY cash gas price action that eased by 1 cent to an index at $2.790/MMBtu.

On a regional basis, West Coast next-day gas price activity was off roughly 9 cents day on day in deals averaging at $2.025/MMBtu, while Gulf Coast spot gas pricing was near unchanged at an index at $2.617/MMBtu. Midwest cash gas prices faltered by around 5 cents on average to an index at $2.419/MMBtu, as Northeast day-ahead gas price action deflated by approximately 10 cents to average at $2.719/MMBtu.

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