April natural gas is set to open 2 cents higher Thursday morning at $1.77 as traders anticipate the last storage withdrawal of the season and see no market stimulus from present weather patterns. Overnight oil markets were mixed.
Wednesday model runs changed little, with anomalous temperature patterns from 15 degrees to 30 degrees above normal common. In a noon Wednesday update, Natgasweather.com said, "There haven't been any major changes to show up in the latest midday weather data, with a stormy but mild pattern expected through much of next week, but still with some cooling expected to push across the Canadian border into the northern U.S. around March 19-20th to bring more seasonable natgas demand.
"Overall, a very stormy but mild pattern is expected through next week, with weather systems traversing the country with showers and thunderstorms but playing out quite mild. This is expected to be followed by at least some cooling arriving at the very end of next week into the following week for at least a couple days. Prices have held up quite well in the face of much lower than normal natgas demand this week and expected to last through much of next, suggesting other market factors are pushing prices higher waiting on at least more seasonal natgas demand to finally return."
Other market factors will certainly be in play when the Energy Information Administration (EIA) releases weekly storage figures. Last year at the same time, 174 Bcf was pulled from storage and the five-year average comes in at a 118 Bcf pull. For the week ended March 4 estimates are coming in at less than half of those numbers.
IAF Advisors calculates a 62 Bcf decline, and Bentek Energy, utilizing its flow model, calculates a 60 Bcf withdrawal. A Reuters survey of 20 traders and analysts showed an average 57 Bcf draw with a range of -65 to -44 Bcf. Next week's early numbers, however, suggest a build of 21 Bcf to a draw of 6 Bcf with an average 6 Bcf increase.
With supplies as burdensome as they are, analysts are expecting a limited market reaction once the number hits trading screens. "Stocks are now nearly 800 Bcf higher that this time last year -- a whopping 45.6% surplus. High side surprise or not, we can't imagine the price action following this week's EIA report to do anything but fizzle," said John Sodergreen, editor of Energy Metro Desk.
In overnight Globex trading April crude oil rose 4 cents to $38.33/bbl and April RBOB gasoline eased a penny to $1.4631/gal.