After rallying on Monday, natural gas futures were trading close to even early Tuesday as the latest guidance pointed to some cooler risks toward mid-April. The May Nymex futures contract was trading 0.6 cents higher at $2.714/MMBtu shortly after 8:30 a.m. ET.

Bespoke Weather Services identified a mix of changes overnight in the latest weather data, seeing American guidance trending colder with European data “nearly flat” versus its previous run.

“All of the modeling continues to advertise a strong blocking regime setting up as we head into the middle third of April, keeping risks to the current forecast skewed to the colder side,” Bespoke said. “As of right now, any cold shot is not expected to be as extreme as we saw in April 2018, as the cold air source up in Canada is not as strong.”

The potential cold could push demand to above-normal levels following a “very warm” six- to 10-day period, according to the forecaster.

“Similar to many of the cold shots we saw through the winter season, the coldest risks appear likely to be focused primarily in the middle of the nation stretching from the Rockies over toward the Midwest,” Bespoke said.

EBW Analytics Group CEO Andy Weissman expressed skepticism over whether Monday’s 4.6-cent rally in the May contract would be sustained.

“Gains were sparked by pipeline scrape reports early in the day that showed a 2.7 Bcf/d drop in production. Model guidance suggesting a potential return of cooler weather in Week 3 also played a role,” Weissman said. “This rebound is likely to be transitory. Pipeline scrape reports frequently show a drop in production at the start of a new month, which is then quickly corrected once better data becomes available.

“Further, the cool shift in the Week 3 forecast, even if it validates, is expected to be mild, and most likely will still result in an injection near 100 Bcf. There are not currently any signs of the type of sustained, significantly colder-than-normal weather needed to have a significant impact on the market.”

Meanwhile, in a recent note to clients, Energy Aspects looked at the potential downside risks to liquefied natural gas (LNG) feed gas demand in the United States given global pricing that has looked “incredibly bearish.”

“With our present set of global balances, U.S. exports are not constrained and end-October U.S. storage is forecast to hit 3.57 Tcf,” the consulting firm wrote. Even if the arbitrage closes for LNG exports, “U.S. balances do not suggest a tank top situation, as actual lost cargoes are likely to be limited and we expect some of the gas not exported to be diverted to price-induced domestic coal-to-gas switching. Of course, that implies global price weakness bleeding into the U.S. market.”

Under the firm’s reference case, Henry Hub prices this summer would average $2.80 and power burn would increase 0.5 Bcf/d year/year.

“If prices were to fall to $2.70, we estimate another incremental 0.7 Bcf/d in power burn versus our reference case. On a monthly basis that would essentially offset one shut-in train, which in turn would take about five cargoes out of the market each month,” Energy Aspects said. “A price decline to $2.60 would offset 1.5 Bcf/d of incremental gas demand versus our reference case, effectively taking about 10 cargoes out of the market each month.

“At most, we expect 96-144 Bcf of LNG could be at risk of being shut in over summer 2019. That range suggests a maximum loss of two trains during the months most oversupplied. If we assume that loss is sustained over a three-month period, that works out to be 1.0-1.5 Bcf/d less LNG feed gas demand than otherwise expected.”

May crude oil futures were up slightly early Tuesday, about 6 cents higher at $61.65/bbl shortly after 8:30 a.m. ET. May RBOB gasoline was trading fractionally lower at around $1.8955/gal.