Despite some colder trends from forecasts over the weekend, weak overall weather-driven demand expectations for March had natural gas futures trading a few cents lower early Monday. The April Nymex contract was down 2.6 cents to $2.745/MMBtu at around 8:50 a.m. ET.

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The end of winter is approaching, and weather-driven demand is “sinking fast,” putting downward pressure on the April contract in recent sessions, according to EBW Analytics Group analysts.

Over the weekend, colder trends in the forecasts brought temperatures for the next two storage weeks (through March 11) “close to seasonal norms, potentially enabling the April contract to hold its ground or even mount a brief push higher,” the EBW analysts said. “So far, however, there are few positive catalysts in sight.”

The Madden-Julian Oscillation has been “showing possible progress into a colder phase later this month,” the analysts added, noting that this keeps open the possibility for a cooler shift in forecasts into the second half of March. “Unless and until it does, however, natural gas futures are more likely to trend lower later this week than to post significant gains.”

Bespoke Weather Services attributed cooler trends in forecasts over the weekend to “lingering effects from some blocking” in the region of the North Atlantic Oscillation, resulting in lower temperatures for the eastern United States.

“This bumps forecast demand up to normal levels late this week into the weekend but only serves to delay the inevitable bigger warming that is on the way next week, when demand falls to very low levels relative to seasonal normals,” Bespoke said. 

While “some variability mixing in at times” is possible, the firm expects “the overall warmer state” to hold moving into the back half of March.

Meanwhile, on the fundamentals side, Bespoke said the outlook was “rather weak” as of early Monday, noting production estimates showing output over the weekend exceeding levels observed prior to last month’s freeze-offs in Texas and the Midcontinent.

Liquefied natural gas feed gas demand “is one spot where there has been improvement, with volumes moving back up to 10.4 Bcf/d, though still off the highs,” Bespoke said. “In short, we feel prompt month prices remain under pressure, with another test of the $2.70 level likely this week.”

Looking at the production estimates, while output has come back online faster than many expected, there could still be some lingering supply impacts from the frigid temperatures that swept through the Lower 48 last month, according to EBW.

“A lack of new completions during the Texas deep freeze and potential balance sheet impairments may further weigh on production later in 2021,” the EBW analysts said.

April crude oil futures were up 53 cents to $62.03/bbl at around 8:50 a.m. ET, while April RBOB gasoline was up about 1.9 cents to $1.9698/gal.