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March natural gas futures trim losses ahead of weekend

Trimming deeper losses notched earlier in the day, NYMEX March natural gas futures ended the week marginally lower Friday, Feb. 23, ahead of the afternoon expiration of the March options contract.

Moving from $2.555/MMBtu to $2.632/MMBtu, the March natural gas futures contract, which rolls off the board at the close of business Feb. 26, settled Friday at $2.625/MMBtu, down just 0.9 cent. April natural gas futures ended the session at $2.657/MMBtu, easing 1.9 cents.

While forecasts could still inspire some late-season gas demand, the general perception is that the peak of the winter heating season is behind the market.

For the week ended Feb. 21, as more moderate weather prevailed in the eastern U.S., natural gas demand was down 14% on the week to 74.8 Bcf/d, according to the U.S. Energy Information Administration's latest "Natural Gas Weekly Update" released Feb. 22.

Looking ahead to the six- to 10-day period, the National Weather Service is calling for average to below-normal temperatures across the West and in areas of the central U.S. Temperatures across the eastern half of the U.S. should run at generally above-average levels.

The agency's eight- to 14-day outlook is projecting normal to below-average temperatures for most of the country. Above-average conditions are seen for areas of the Northeast and southern Florida through the extended period.

The moderating weather should trim the size of natural gas storage withdrawals in the coming weeks. As of the week ended Feb. 16, total U.S. working natural gas supply was 1,760 Bcf, or 609 Bcf below the year-ago level and 412 Bcf below the five-year average storage level of 2,172 Bcf, after the EIA reported a net 124 Bcf was pulled from storage. The pull compared to the 92-Bcf year-ago withdrawal and the 145-Bcf five-year average pull.

The EIA said that if net gas storage draws match the five-year average for the balance of the withdrawal season, total U.S. natural gas inventories could reach 1,290 Bcf on March 31, which is 24% lower than the five-year average and the second-lowest end-of-season level reported 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 and natural gas index prices, as well as forwards and futures, visit our Commodities pages.