Continued milder trends in the latest weather data had natural gas futures trading lower early Tuesday, following through on a sharp sell-off from the previous session. At around 8:40 a.m. ET, the January Nymex contract was down 3.6 cents to $2.178/MMBtu.
Overnight data from both the Global Forecast System and European models extended milder trends from over the weekend and Monday, shedding more heating demand from the outlook, including into the first week of January, according to NatGasWeather.
“No changes overall, with an exceptionally warm and bearish pattern over most of the U.S. besides the West through the coming weekend,” the forecaster said. “A quick cool shot is still expected across the Midwest and Northeast the last couple days of December but not very cold or impressive.
“Additional cold shots are expected into the western and northern U.S. the first week of January; it’s just the weather data has trended less impressive with the amount of sub-freezing air into the U.S. and also doesn’t advance cold air as far southward or eastward, especially in the European model.”
Meanwhile, looking ahead to this week’s Energy Information Administration (EIA) inventory report, pushed back to a Friday release to account for Wednesday’s Christmas holiday, analysts are expecting a withdrawal well into the triple digits.
Energy Aspects issued a preliminary estimate for a 168 Bcf pull for the week ended Dec. 20.
“Freeze-offs have dragged on production” over the past week, the firm said. “Sub-freezing temperatures have cost Appalachia 0.5 Bcf/d since Dec. 15 amid winter storms, while the Rockies, San Juan and Haynesville have lost 0.2 Bcf/d each” last Tuesday and Wednesday (Dec. 17-18). “We expect total Lower 48 production to drop by 1.0 Bcf/d week/week as a result.”
Meanwhile, liquefied natural gas (LNG) feed gas demand has reached new highs over the past week, topping the 8 Bcf/d mark.
“Increased flows to Cameron Train 2 moved the terminal over 1.0 Bcf/d for the first time” last Wednesday, “while intake at Sabine Pass and Corpus Christi continues to exceed nameplate capacity,” Energy Aspects said.
Analysts at Genscape Inc. estimated a 153 Bcf pull for Friday’s EIA report.
“While this would be the largest pull so far this winter, and notably larger than last winter’s same-date draw, it would still be looser than the five-year average by about 1.3 Bcf/d,” Genscape senior natural gas analyst Eric Fell said.
February crude oil futures were trading 24 cents higher at $60.76/bbl at around 8:40 a.m. ET, while January RBOB gasoline was up about 1.2 cents to $1.7175/gal.