With the weather outlook mostly steady overnight, and with the market looking ahead to new storage data from Energy Information Administration (EIA), natural gas futures were trading slightly lower early Thursday. The March Nymex contract was off 0.9 cents to $1.946/MMBtu at around 8:40 a.m. ET.
Estimates for the latest storage report, scheduled for 10:30 a.m. ET, have EIA reporting a withdrawal in the mid- to high 140 Bcf range for the week ended Feb. 14.
A Bloomberg survey projected withdrawals as low as 138 Bcf and as high as 158 Bcf, while a Wall Street Journal poll had estimates as low as 135 Bcf. Reuters polled 19 analysts, who estimated withdrawals as high as 166 Bcf. NGI’s model pegged the storage draw at 149 Bcf, which would compare with the 163 Bcf withdrawn in the similar year-ago period and the five-year average draw of 136 Bcf, according to EIA.
“It was warmer than normal over the East and much of the West, while cold across the central U.S.” during this week’s storage report period, NatGasWeather said. “Our algorithm forecasts a draw of 143-145 Bcf.”
As for the latest weather outlook, the forecaster noted a drop of around 15-20 heating degree days (HDD) from the Global Forecast System over the prior 36 hours, including 3-4 HDD shed overnight.
“However, the European model has been running colder comparatively and has given back very little demand the past 36 hours,” NatGasWeather said. “These are important differences in need of watching since either the GFS will trend back colder or the European model will trend milder, either of which could lead to a market response.
“...What the natural gas markets could begin getting concerned about is much of the weather data favors cold retreating into Canada March 3-5 as a more seasonal pattern returns. Essentially, the back end of the 15-day forecast might need to be colder if newly found bullish weather sentiment is to continue.”
Analysts at EBW Analytics Group viewed the weather picture as largely unchanged outside of a slight delay to cooling expected between days six and 10 of the outlook period.
“Several factors have muted the market’s response to last weekend’s shift to a variable pattern,” the EBW analysts said. “Among others, predicted temperatures are not cold enough to seriously dent the storage surplus, the end of the withdrawal season is in sight and demand” for U.S. liquefied natural gas exports “remains in doubt.”
Meanwhile, with major surveys indicating a withdrawal between 141 and 147 Bcf, a pull on the lighter side of that range could further weaken prices, according to EBW.
March crude oil futures were up 54 cents to $53.83/bbl at around 8:40 a.m. ET, while March RBOB gasoline was trading fractionally higher at $1.6716/gal.