After heavy selling last week, natural gas futures climbed back above the $1.700/MMBtu mark early Monday, helped by continued tightening in the underlying supply/demand balance. The April Nymex futures contract was up 2.5 cents to $1.709 at around 8:30 a.m. ET.

Looking at the weekend weather data, the outlook from the European model remained mostly unchanged, while its American counterpart lost an additional 10 heating degree days, according to NatGasWeather.

“Both are consistent in showing the only decent cold shot in the next 15 days being Friday to Saturday,” and the overall pattern points to “bearish weather headwinds” continuing “through the first half of March,” NatGasWeather said. “The past few months have shown considerable tightening in the supply/demand balance, highlighted by Lower 48 production dropping 4-5 Bcf/d off all-time highs” and liquefied natural gas (LNG) feed gas demand reaching record highs.

“However, weather patterns have trended milder all winter long, preventing the tighter supply/demand balance from being taken advantage of, driving natural gas prices to multi-year lows...Also of consideration, there have been huge daily price moves in most markets due to coronavirus fears. This could again carry over to the natural gas markets, especially if LNG export forecasts decrease due to cargo cancelations.”

Maxar’s Weather Desk observed cooler trends for the Midwest late in the period from Saturday through March 11 when compared to its forecast issued Sunday.

“Still, the period is a broadly warmer than normal one,” the forecaster said. “Much above normal temperatures are from the Rockies to the Midwest from early to mid period and in the East during the latter stages. Any below normal coverage is associated with early period high pressure in the South and East. Belows are also from early to mid period in the Pacific Northwest.”

Further out in the March 12-16 time frame, Maxar said the “general themes” carried over in its latest forecast Monday except for a “cooler adjustment accompanying early period high pressure in the East” and warmer trends in the Midcontinent. The pattern indicates “widespread coverage of above normal temperatures, including much aboves in the Midwest.”

Looking nearer term, Genscape Inc. expects demand to rise this week, with the latest weather models leaning slightly colder for the next several days. Compared to Friday’s outlook, the firm’s meteorologists now project an increase of about 2.4 Lower 48 population-weighted HDD for Wednesday through Sunday.

“Revisions affected all regions, but western markets from the Desert Southwest to the Pacific Northwest received the largest changes and are also expected to show the largest deviations from seasonal norms,” Genscape senior natural gas analyst Rick Margolin said. “As a result, we project Lower 48 demand to post daily increases of about 2.5 Bcf/d through Friday, with demand by Friday reaching a peak for the 14-day forecast period of 93.2 Bcf/d.”

April crude oil futures were up 58 cents to $45.34/bbl at around 8:30 a.m. ET, while April RBOB gasoline was trading fractionally higher at $1.4879/gal.