With day-to-day life upended by the coronavirus outbreak and stocks plummeting, natural gas futures sagged under the pressure as markets weighed the prospect of demand destruction from the nation’s new social distancing regimen. The April Nymex contract fell 5.4 cents to settle at $1.815/MMBtu after trading in a range from $1.778 to $1.854.

In the spot market, gains in the West on below-average temperatures moving through the next few days partially offset discounts elsewhere; NGI’s Spot Gas National Avg. fell 3.5 cents to $1.665/MMBtu.

“Compared to other commodities, natural gas would be a lot lower,” INTL FCStone Financial Inc. Senior Vice President Tom Saal told NGI Monday. This may be partly because “natural gas has been depressed for a long time pricewise compared to other forms of energy.”

The fall in oil prices, and the prospect for a reduction in associated gas output, also has likely helped to limit the declines for natural gas, Saal said.

There might have been some short covering among speculators — heavily net short as a group — behind last week’s rally, but it “wasn’t enough” to break above resistance around $2, Saal said. The rally “failed to get above $2, so now it’s kind of fizzling out.”

Two opposing forces are pressuring prices as markets face significant headwinds from the coronavirus, according to analysts at EBW Analytics Group.

“The battle between bulls expecting a steep decline in production of associated gas and bears fearing a recession and contraction in demand most likely is not over,” the EBW analysts said.

But the demand impacts from efforts to contain the spread of the coronavirus could be considerable.

“School closings alone…are sufficient to wipe out a significant slice of demand for gas,” according to EBW. “Industrial demand in the U.S. is also likely to take a hit,” and the risk of a curtailment in Lower 48 liquefied natural gas (LNG) exports “is growing every day” as the global economy grows weaker.

“Price volatility is likely to remain high, with a growing downside price risk and less potential upside than seemed possible just a few days ago.”

Genscape Inc. estimated a 1 Bcf/d day/day drop in feed gas deliveries to U.S. LNG terminals for Monday, with volumes totaling 7.29 Bcf/d.

The firm alerted clients Sunday that its proprietary monitors “detected significant disruptions to operations at Sabine Pass. The cause of the disruption is not immediately known but contributes to a run of highly volatile LNG numbers of late: in the past 30 days, LNG feed gas volumes have ranged from as low as 6.8 Bcf/d to as high as 8.8 Bcf/d.”

On the supply side, the list of exploration and production (E&P) slashing spending in response to the new realities in the crude oil market continues to grow, with EQT Corp. and EOG Resources Inc. among the latest to announce cuts.

U.S. production is forecast to “bear the largest impacts” through 2021 from Covid-19 and the price war now ongoing between the Organization of the Petroleum Exporting Countries and former ally Russia, IHS Markit researchers said Monday. U.S. oil output alone is forecast to crater by 2-4 million b/d over the next 18 months.

“The last time that there was a global surplus of this magnitude was never,” said IHS’ Jim Burkhard, head of oil markets. “Prior to this the largest six-month global surplus this century was 360 million bbl. What is coming will be twice that or more.”

Prices could push even lower before they rebound, according to Raymond James & Associates Inc. analysts. West Texas Intermediate is likely to test $20/bbl during the second quarter “before rebounding strongly in the second half of 2020” and exiting the year at $45-plus, they said.

As for dry gas production, modeled flow data from Enverus showed a 0.17 Bcf/d decrease in Lower 48 output last week, driven by a 0.28 Bcf/d decline in the East, partially offset by a 0.10 Bcf/d increase in the Mountain region. The firm estimated a 0.67 Bcf/d decline in Canadian imports for the week.

The collapse in crude prices has “brought some bullish sentiment to the natural gas market with the anticipation of decreases in associated gas production to help balance the oversupplied market,” according to Enverus. “However, prices weren’t able to hold near the $2 mark, and since opening last week the April 2020 contract has traded in a range between $1.610 and $1.998.”

Looking at the weather picture, the midday Global Forecast System trended somewhat milder for this weekend but colder over the northern part of the country around March 28-31, according to NatGasWeather.

“No major changes overall as the theme and timing remain the same, with the pattern too mild this week, cold enough this weekend into Monday, then rather seasonal March 25-30 with bouts of cooling across the northern U.S., but still quite comfortable across the southern U.S.,” the forecaster said.

Chilly temperatures coming out of the weekend resulted in “strong national demand” early Monday, NatGasWeather said. However, “warm conditions will be returning to dominate most of the country Tuesday through Friday, with highs of 50s to 80s besides the West Coast and far North for a return to light national demand.”

That drop-off in demand helped send spot prices lower Monday, with the discounts prevalent throughout the eastern two thirds of the Lower 48. In the Midwest, Joliet slid 9.5 cents to $1.645, while in the Northeast, Tenn Zone 6 200L slumped 20.5 cents to $1.855.

Upstream in Appalachia, Texas Eastern M-2, 30 Receipt tumbled 16.5 cents to $1.385.

An unplanned outage late last Friday on the Texas Eastern Transmission (Tetco) system on its Line 25 between Berne, OH, and Holbrook, PA, was impacting about 130 MMcf/d of capacity, Genscape analyst Josh Garcia said in a note to clients early Monday.

As of Sunday “capacity at the Berne 30-inch Line compressor has been reduced from a normal level of 1.7 Bcf/d to 1.57 Bcf/d, although M-2 export flows towards the Gulf Coast fell by 228 MMcf/d in that time period,” Garcia said.

Tetco said in a notice to shippers over the weekend that repairs were underway on Line 25 but that “the estimated time of restoration is unclear at this time.”

In contrast to the discounts farther east, many western U.S. hubs posted gains in Monday’s trading. In the Rockies, Kern River climbed 13.5 cents to $1.890. In Arizona/Nevada, El Paso S. Mainline/N. Baja surged 36.5 cents to $2.105. In California, SoCal Citygate jumped 20.5 cents to $2.585.

The National Weather Service (NWS) Monday was calling for “an anomalously strong mid to upper level low” to push “slowly eastward” over the next couple days, moving inland across California Tuesday and Wednesday into the Great Basin and Southwest.

This system was expected to “support a broad region of much below average temperatures over the next two days, with high temperatures 10-20 degrees below average across California, the southern Great Basin and the Southwest,” the NWS said.