Despite strong U.S. export rates and signs of stronger industrial demand on the Gulf Coast, gas futures moved lower on Friday, finishing in the red for just the second time during trading week . April Nymex contract set at $ 2.557 / MMBtu, down 1.3 cents a day / day.
May, however, rose three-tenths of a percent to $ 2.619. April’s contract goes off the table after Monday’s trade. If prices went up during that time, the new bullish month would open comfortably ahead of $ 2,600.
Meanwhile, NGI’s Avg National Spot Gas collapsed. 7.0 cents to $ 2.215.
Demand for U.S. natural gas (LNG) was strong on Friday, as it is for most of this month amid declining supply and increased need for imports in Europe. LNG feed gas volumes rose to 11.6 Bcf on Friday, according to NGI data. Levels are kept above the 11 Bcf threshold all week, as they have more than a majority of days in March.
This has helped counteract moderate demand driven by the weather at home, as the lower 48 spawn into the spring season, when heating needs to go down. and that most Americans only start running aircraft in the midst of mild temperatures.
Weather Services deliberately said Friday “lower-than-normal demand is still readily available in the next few weeks.” Raindrops and rainstorms were expected to inject doses of regional heating demand in the coming week. However, overall, the weather is expected to play a small part in the next few weeks in terms of driving natural gas consumption. That outlook overshadowed Friday’s futures.
That noted, the recovery of industrial demand following the Arctic freeze that affected Texas’ s energy industry in February could give the near – term boost to demand. Analysts said such a rise in demand was evident in Thursday’s inventory report.
The latest U.S. Energy Information Administration (EIA) storage report showed that 36 Bcf was withdrawn for the week ending March 19th. The print was steeper than predicted for a pull in the low to mid 20s, and marked the first result on the optimistic side of estimates found with big polls in a month.
“Gulf Coast’s industrial demand for natural gas appears to have helped drive bullish output,” said analysts at EBW Analytics Group. They added that we have other business benefits ahead. “We estimate that 1.0-2.5 Bcf / d of industrial demand for gas is still offline. As this returns online in the coming weeks and months, the normal gas / natural gas demand balance may be tightening. ”
[NGI’s natural gas price indexes have included trade data from both price reporters and the Intercontinental Exchange (ICE) since 2008. Find out more about our price index data here.]
The decline in stocks for the week of March 19 reduced investments to 1,746 Bcf, compared to the previous year’s average of 2,009 Bcf and the five-year average of 1,824 Bcf.
“Although this was the fourth loose stat in a series, it was tighter than the previous three weeks as brewing / petrochemical demand is becoming more and more normal,” Wood analyst MacKenzie Eric Fell said after the EIA report. The analyst said, “It is worth reminding those who rely heavily on year / year comparisons that we are beginning to miss out on the huge business demand losses associated with the Covid closures. -19 which started in March last year. ”
Analysts at Tudor, Pickering, Holt & Co. said. (TPH) that the latest EIA print could mark the end of the withdrawal season. They predicted an injection of 12 Bcf for the next EIA report.
“If this week ends at the end of the pull-out season, we will end up with a cumulative pull-off of 2.17 Tcf, 26% ahead of last year and the highest level since last winter. 2013/14, ”said TPH analysts. “More is to say that the huge cumulative attraction comes despite full degree days just 1% ahead of norms, indicating that there are too many products on the market.”
If supply ramps are not up, TPH analysts said Lower 48 stocks could move around 3.25 Tcf by the end of the upcoming injection season. “If this prognostication proves to be reasonably correct, we expect a significant increase in summer prices ($ 3.00-3.25 / MMBtu) to shift gas-to-coal shifts and add more gas to storage. before winter, ”they said.
Price sputter prices
Without a capital for heating demand, cash prices on Friday declined across all regions.
Entering the last trading session of the week, the weather was extremely active with a deadly thunderstorm that spawned a devastating tornado over sworn Alabama and neighboring states in the southeast late Thursday.
The storm, however, did not counteract mild temperatures in the region or stimulate additional demand for natural gas.
Weekend forecasts did not provide much incentive for larger purchases.
Forecasters expected light national demand over the weekend with high temperatures ranging from the 60s in the East to 80s across the South and Western areas, AccuWeather forecasts showed. Highs in the 50s were expected over much of the Midwest, with colder but moderate 40s in parts of the Mountain West.
The northeastern corner of the United States was expected to be covered with snow early over the weekend, according to AccuWeather, followed by an explosion of cold water and possibly more snow by Monday. But the winter mix was expected to be in the northern plains of New England. Major Northeast markets like Boston were expected to experience highs in the 50s over the weekend and into Monday.
Against that background, prices were down across the west of the country. Kern Delivery fell 39.5 cents a day / day to $ 2.370 on average, while SoCal Citygate lost 26.0 cents to $ 2.665 and SoCal Border Avg. lost 26.0 cents to $ 2.350.
In Texas, Waha fell 12.5 cents to $ 2.135 and El Paso Permian lost 13.5 cents to $ 2.135.
Further east, the Millennium Pool fell 20.5 cents to $ 1.505.