Against a backdrop of coronavirus-related demand destruction, expectations for milder weather later this month continued to keep pressure on natural gas futures prices early Wednesday. The May Nymex contract was down about 2.4 cents to $1.626/MMBtu at around 8:30 a.m. ET.

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Over the past few days models have been consistent in showing moderating temperatures later this month following a stretch of colder-than-normal temperatures this week, according to Bespoke Weather Services.

“The overall theme continues to be for a tame, near-normal demand period after April 20, likely lasting through the end of the month,” Bespoke said.

Meanwhile, the market is in need of something that can tighten the supply/demand balance “in order to get any rally going at the front of the curve,” the firm said, pointing to recent Energy Information Administration (EIA) storage reports that have been “very loose.”

“It looks like we are headed for another loose number tomorrow, as demand destruction continues due to the economic shut-downs,” Bespoke said. “There is talk of some partial re-opening of things in a few weeks, but it is unclear if that will actually occur or not.”

After Tuesday’s sell-off, the prompt-month contract could establish a new low for the year by the end of the week, according to analysts at EBW Analytics Group. Tuesday’s selling was attributed in part to “a move out of energy commodities,” they said.

“Nymex crude nosedived, with the front-month contract re-testing support at $20/bbl. The May-July natural gas contracts followed crude lower, with asset allocation managers looking to move funds to sectors poised to earn more attractive returns,” the EBW analysts said.

But the demand outlook for natural gas likely played an even bigger role in the sell-off, they said.

Analysts pointed to a “growing recognition that once the current round of cold weather ends, demand for natural gas is likely to plummet, with the potential for the first triple-digit injection of the year” during the last week of April. “After yesterday’s sell-off, bulls are unlikely to return to the natural gas market soon, opening the door to significant further price declines over the next few weeks.”

As of early Wednesday, a Bloomberg survey was showing a median expectation for a 65 Bcf injection for this week’s EIA storage report, with predictions ranging from 42 Bcf to 78 Bcf.

Last year EIA recorded a 73 Bcf build for the similar week, and the five-year average is a build of 27 Bcf.

May crude oil futures were down 44 cents to $19.67/bbl at around 8:30 a.m. ET, while May RBOB gasoline was trading fractionally higher at around 72.9 cents/gal.