Following disagreement in the weather models overnight, including a notably warmer outlook from the European data, natural gas futures were trading lower early Wednesday. Heading into its first day as the prompt month, the April Nymex contract was down 4.8 cents to $2.748/MMBtu shortly after 8:30 a.m. ET.
The overnight weather data offered mixed signals, with the Global Forecast System (GFS) adding 15 heating degree days (HDD) to the outlook as the European model trended warmer to drop 7-8 HDDs compared to Monday’s data, according to NatGasWeather.
“The overall timeline of major weather features to impact the U.S. remains intact, with frigid cold blasts arriving this weekend through next week, but still with a warm ridge favored across the southern and eastern U.S. March 10-13 and where the data is neutral to slightly bearish,” the forecaster said.
Milder trends that showed up in Tuesday’s forecasts likely sapped some of the momentum the bulls had built up to that point, NatGasWeather said.
“It was possible bears could be waiting to sell the recent rally on the first signs of milder trending weather data after many successive days of colder trends,” the forecaster said. “But now with the overnight GFS trending notably colder and the European trending further warmer, today’s midday and afternoon weather data will be watched closely to see which model is more correct.”
Radiant Solutions made warm adjustments to its latest six- to 10-day and 11-15 day forecasts Wednesday.
The six- to 10-day forecast “leans warmer from previous expectations in the West, Plains and East; although, colder changes are associated with a firmer push of high pressure into the Southeast at mid-period,” Radiant said. “This time frame remains influenced by a strong blocking ridge over Alaska, which is directing polar air southward and resulting in widespread coverage of much to strong below normal temperatures.”
The “coldest anomalies” will be focused in the central part of the Lower 48, but Radiant also expects the East to see some strong below normal temperatures in the six- to 10-day period.
As for the 11-15 day, Radiant noted warmer changes versus its previous outlook “focused in the South and East during the early half of the period. At that time, a more organized storm system tracking across the Eastern Half is now projected behind the warmer changes. That said, the pattern remains a colder than normal one nationally, with areas from the West to Central being the focal point of below to much below normal temperatures.”
In the near term, pipelines serving Midwest and East markets are bracing for a ramp-up in demand heading into next week and have started issuing system flexibility limitations, according to Genscape Inc. The firm’s daily supply and demand data showed Midwest region demand at 25 Bcf/d as of Wednesday, with that number expected to exceed 30 Bcf/d by next week. East region demand is expected to top 40 Bcf/d Monday and continue climbing.
In the Midwest, pipelines including ANR, Mississippi River Transmission and Northern Natural Gas had issued notices as of Wednesday warning shippers of restrictions or limitations on their respective systems amid higher demand, according to Genscape senior natural gas analyst Rick Margolin.
Meanwhile, several pipelines further East, including Columbia Gas, Dominion Energy Carolina Gas Transmission, Equitrans, East Tennessee, Iroquois and Millennium had similarly warned shippers of system restrictions ahead of the upcoming cold, including a number of operational flow orders, Margolin said.
April crude oil futures were trading $1.19 higher at $56.69/bbl shortly after 8:30 a.m. ET, while March RBOB gasoline was up about 2.3 cents to $1.6089/gal.