May natural gas was set to open Monday about 2 cents higher at around $2.746 as forecasts continued to show colder temperatures hanging around for the first two weeks of April, past the end of the official heating season.
The June contract was set to open about 2 cents higher at around $2.792.
Bespoke Weather Services said forecasts over the holiday weekend showed “colder trends in the short- and medium-range as models picked up on a couple of very strong cold shots through April 10, but gradually warmer trends from April 10 through the middle of the month as cold intensity should ease.”
The “intense cold” to begin April means “storage withdrawals will continue longer than usual...and that will remain a supportive factor as storage levels get depleted,” Bespoke said. But production remains strong, while a bearish miss in last week’s Energy Information Administration storage report “had us seeing balance as far looser.
“Though we could see a modestly tighter print this week, weather will only be able to absorb looseness for so long, especially if prices make another move over $2.75.”
NatGasWeather.com similarly noted “cool to cold conditions across much of the northern U.S. April 1-10 in a relatively bullish setup.
“...Bigger picture, with cool conditions holding...this will stall the refills season by at least one, potentially two weeks, increasing deficits versus the five-year average to around 400 Bcf, while also ending the draw season with supplies slightly under 1,350 Bcf,” NatGasWeather said. “This would be quite bullish if it wasn’t for the fact that Lower 48 production keeps setting fresh all-time highs, exceeding 78 Bcf/d last week.”
In its six- to 10-day (April 7-11) outlook Monday, Radiant Solutions said, “Strong high pressure from Canada settles into the Midwest at the onset of the period, promoting widespread much belows and strong belows across the eastern half.”
The period showed colder changes versus Sunday’s forecast, Radiant said, with some models “having cold air progressing further south...However, any slight changes in the positioning of the boundary will have major implications on temperatures especially in Texas. Temperatures moderate somewhat ahead of low pressure mid-period before another round of weaker high pressure looks to progress into the eastern half late.”
May crude oil was set to open about 3 cents higher at around $64.97/bbl, while May RBOB gasoline was down fractionally at around $2.0191/gal.