Overnight gains gave way to losses for April natural gas Thursday, March 15, as the latest storage data outlined a withdrawal from stocks that was below consensus and the five-year-average pull. The contract tumbled to a $2.664/MMBtu low and settled 5.0 cents lower at $2.681/MMBtu.
The U.S. Energy Information Administration reported a net 93-Bcf withdrawal from natural gas inventories in the Lower 48 during the week ended March 9 that was below the 100-Bcf consensus expectation and below the five-year-average draw of 97 Bcf but was above the 55-Bcf withdrawal reported for the corresponding week in 2017.
The pull brought total U.S. working gas supply to 1,532 Bcf, and while widening the deficit to the year-ago level to 718 Bcf, it trimmed the deficit to the five-year average to 296 Bcf.
While the total working gas supply remains below the five-year average, it is within the five-year-average range and is expected to be adequate as the market moves away from weekly withdrawals and into weekly injections with the arrival of milder spring weather.
Cold weather remains in midrange weather forecasts, but longer-range outlooks point to warm weather from April to June.
The latest weather maps from the National Weather Service for the six- to 10-day and eight- to 14-day periods show that below-average temperatures will expand across the majority of the country. Portions of the southern tier of the U.S. will see a mix of average and above-average temperatures.
Lingering cold in major heat-consuming regions could keep demand supported and drive larger storage withdrawals compared to historical averages, but the market remains cautious given the calendar and the higher low temperatures associated with the changing seasons.
In forecasts updated March 15, the National Oceanic and Atmospheric Administration is projecting warmer-than-normal temperatures for much of the country from April through June, 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.
With the warming, weekly natural gas storage withdrawals should turn to weekly storage injections as demand for heating is erased ahead of a significant uptick in cooling load.
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