More overnight warm trends signaling weak weather-driven demand for April kept the pressure on natural gas futures early Wednesday. The May Nymex futures contract was down 0.9 cents to $2.563/MMBtu as of around 8:40 a.m. ET.
Bespoke Weather Services reported a drop in gas-weighted degree day (GWDD) expectations for the 15-day outlook period in its latest forecast early Wednesday, continuing what it described as an overall bearish shift in weather trends as of late.
“Weather models continue shaving off a few GWDDs from the forecast for the balance of April, which has been a common theme for a solid week now,” Bespoke said. Guidance places “demand levels near historic lows for the time of year over the next week two weeks thanks to a pattern dominated by a lack of blocking, as well as a good deal of warmer Pacific flow entering North America.”
It’s currently too early to see any “meaningful” cooling degree days in the forecast, “but should this pattern continue as we head into the first half of May, we will be at risk to see some cooling demand at least across parts of the South, which could be interesting as far as getting an early assessment of how burns will perform with any heat.”
Radiant Solutions highlighted warmer changes for both the six- to 10-day and 11-15 day periods in its latest forecast Wednesday.
Hotter changes in the six- to 10-day period were focused in Southwest, “where peaks in the mid-90s in Las Vegas and upper 90s in Phoenix are expected,” Radiant said. “Changes were minor in the eastern half but lean warmer in the Southeast in the mid to late period. As in the previous outlook, temperatures in the above to near much above normal categories are out ahead of a weak frontal boundary slowly making its way through the East in the early half, while temperatures fall back to seasonal levels in its wake.
“The Northwest falls below normal late, but ahead of an associated trough are a return of aboves and much aboves to the Midcontinent.”
As for the latest 11-15 day outlook, Radiant highlighted warmer changes focused in the Midwest and East.
“Overall, the pattern remains a warmer than normal one nationally, with aboves persisting in the Southwest and along the East Coast,” the forecaster said.
Exports to Mexico have dropped to a more than 100-day low coinciding with the start of a previously reported maintenance event on the NET Mexico export line in South Texas, according to Genscape Inc.
“Total U.S. exports to Mexico for today are just under 4.28 Bcf/d after having averaged 4.95 Bcf/d in the prior seven days, including a single-day high of 5.12 Bcf/d,” senior natural gas analyst Rick Margolin told clients Wednesday. The NET Mexico maintenance is scheduled through Sunday, “during which time cross-border flows to northeastern Mexico could be cut by as much as 1.1 Bcf/d, assuming no alternative export lines pick up the slack.
“While that had been the case in previous years when NET Mexico conducted similar maintenance, this year may be slightly different with the new Howard Energy Impulsora export pipeline operating.”
May crude oil futures were up 39 cents to $64.44/bbl at around 8:40 a.m. ET, while May RBOB gasoline was up about 1.3 cents to $2.0450/gal.