April natural gas is expected to open 2 cents lower at $2.82 as traders factor in what is likely to be the last triple-digit draw on inventory along with what is expected to be a robust injection season. Overnight oil markets rose.
Weather models overnight still called for longer-term cooling, but the forecasts became less intense. Commodity Weather Group in its Thursday morning outlook said, "This morning's forecast confidence was reduced as the overnight weather model guidance collectively pulled back on the strength of Alaskan ridging next week as well as the downstream impacts over North America. The big picture concept of a transition from a warm one- to five-day to a cooler to colder six- to 15-day in the East remain intact, but the intensities of that cooling lessened on most recent modeling, with the coldest anomalies more frequently focused over the Northeast instead of the Midwest and South as much."
The 10:30 a.m. EDT release of Energy Information Administration (EIA) storage figures will give analysts the final touches to their end-of-season inventory figures going forward into the shoulder and summer-season injection months. Earlier estimates in the plump 1.7 Tcf range have been honed down to about 1.5 Tcf. The latest government figures show Lower 48 production to be about 10 Bcf greater than a year ago, and that is likely to present challenges for gas seeking a storage refuge.
Last year, 189 Bcf was pulled from storage and the five-year average stands at 116 Bcf. Ritterbusch and Associates calculates a pull of 195 Bcf, and a Reuters survey of 23 traders and analysts revealed a sample mean of 191 Bcf with a range of 171 Bcf to 201 Bcf. Bentek Energy's flow model predicts a withdrawal of 198 Bcf. Bentek said in a report that demand had fallen more than 6 Bcf/d from the previous week to average 99.9 Bcf/d.
"This marks the first time in the past three weeks where demand averaged below 100 Bcf/d," Bentek said. "Even though demand declined, production remained challenged by freeze-offs and averaged just 71.4 Bcf/d, which is in line with the previous week's average but nearly 1.0 Bcf/d below the previous five-week average."
The company said its sample of withdrawal activity "declined in each region compared to the pevious week, with the largest sample decline occurring in the East Region. The larger facilities, such as Dominion, ANR and Bluewater all reported smaller withdrawals week-over-week. The majority of the decline in the Producing Region's withdrawals occurred within Bentek's sample of salt dome facilities.
"There is additional risk to this week's forecast from the West Region due to the loss of CIG facilities as they transitioned their electronic bulletin boards to the DART system," the firm said.
In overnight Globex trading April crude oil added 42 cents to $48.59/bbl and April RBOB gasoline rose 3 cents to $1.8598/gal.