After some notably warmer forecast trends overnight, natural gas futures were trading slightly lower early Friday. The May Nymex contract was down 1.5 cents to $2.697/MMBtu shortly after 8:30 a.m. ET.
Weather data during the day Thursday had advertised milder trends except for the European model. But the European model “flipped considerably warmer” overnight to drop 24 heating degree days from its outlook compared to Thursday’s run, according to NatGasWeather.
“All overnight weather models were warmer/bearish trending with the pattern for the first half of April, especially so with the European model as it proved it had to catch up to the rest of the warmer data,” NatGasWeather said. “...Simply put, after a rather strong late season cold blast late this weekend through early next week, a rather bearish pattern is expected to dominate the country April 5-12 with very light national demand.”
The latest data overnight advertises temperatures in the 70s and 80s across much of the country April 8-12, according to the forecaster, and this period “should be a good test to see how large builds can be this shoulder season when favorable weather conditions and near record production work in concert.”
The Energy Information Administration’s (EIA) weekly storage report Thursday showed a 36 Bcf withdrawal for the week ended March 22, compared to a five-year average withdrawal of 41 Bcf and a 66 Bcf pull recorded in the year-ago period. Total Lower 48 working gas in underground storage stood at 1,107 Bcf as of March 22, 285 Bcf (20.5%) below last year’s stocks and 551 Bcf (33.2%) below the five-year average, according to EIA.
The 36 Bcf pull for the week implies the market was 2.3 Bcf/d looser than last year on a weather-adjusted basis, according to analysts with Raymond James & Associates. The market has averaged 2.3 Bcf/d looser over the past four weeks, they said.
Compared to degree days and normal seasonality, Genscape Inc. analyst Margaret Jones said this week’s figure is about 2.0 Bcf/d looser than the five-year average.
“Total power generation was down around 12 average GWh versus the previous week,” Jones said. “Nuclear and renewable generation was down around 15 average GWh as wind fell off by 14 average GWh. Nuclear generation also dropped by a little over 1 average GWh as nuclear gen continues to come offline during refueling season.
“Coal was down around 2 average GWh, and gas was up 6 average GWh week/week for an estimated 1.0 Bcf/d more gas burn week/week.”
May crude oil futures were up $1.13 to $60.43/bbl shortly after 8:30 a.m. ET, while April RBOB gasoline was up about 3.5 cents to $1.9153/gal.