Natural gas futures rallied Tuesday as large storage deficits continued to lend support for prices. In the spot market, most regions saw small adjustments on moderating demand this week, while the volatile SoCal Citygate retreated from Monday’s price spike; the NGI National Spot Gas Average added 2 cents to $2.47/MMBtu.

The May contract, set to expire Thursday, settled 4.1 cents higher at $2.781 Tuesday. June added 3.8 cents to settle at $2.813.

“For over two months now this market has been frustrating bulls and bears alike,” ICAP Technical Analysis analyst Walter Zimmermann said in a note to clients Tuesday. “Natural gas has given us a whip-saw — price action caught between key support and key resistance.”

Zimmermann said the bulls need “a decisive weekly close above $2.800 to have any case” for prices to move higher, while on the other hand the bears would need a weekly close below $2.520.

“The average winter to spring rally is a 52% gain in spot contract value from Feb. 14 to May 26,” according to Zimmermann. “The $2.530 low hit on Feb. 15. Where is the pre-season rally? Good question. But it is too early to conclude we will not have one this year.”

Bespoke Weather Services said price action along the strip Tuesday “appeared to indicate that the market is increasingly becoming concerned about limited stockpiles (which have helped keep cash elevated with this recent bullish weather).

“…We did see a bit more winter participation in the rally” on Tuesday, “but not enough to expect prices to break significantly out of their current trading range,” the firm said. “Rather, we would look for continued May strength into expiry despite a lagging strip,” as the Energy Information Administration (EIA) storage report on Thursday “should be quite supportive, and ever since last Friday we have seen prices biased upwards with occasional signaling storage is the catalyst.”

But the Bespoke team said it didn’t see too much support from the latest weather guidance Tuesday afternoon, noting that it expects “to only gradually continue to lose gas-weighted degree days into the middle of May, with nothing inspiring except for the next few days.”

Powerhouse CEO Al Levine said his outlook on natural gas is bullish based on storage deficits — approaching 500 Bcf versus the five-year average — that have widened with recent cold weather.

If deficits were to continue to increase, “I think you could easily see this thing start to move higher. It just seems very clear to me that this is not a market that wants to go down,” Levine told NGI. “We’re producing a lot,” but the market hasn’t moved lower “because we’re not retaining it yet.”

Meanwhile, shoulder season maintenance has contributed to a “modest retreat” in production recently, according to Genscape Inc. analyst Rick Margolin. The firm’s Spring Rock daily pipe production estimate on Monday showed weekend production averaging around 78.4 Bcf/d, putting the recent seven-day average at 78.23 Bcf/d.

“That average is about 138 MMcf/d below the running 30-day level, but also nearly 0.8 Bcf/d below the 30-day (and all-time) high of 79.02 Bcf/d set April 9,” Margolin said. “Since that time there has been a 0.62 Bcf/d drop in Gulf Coast-area production, with several offshore platforms down for maintenance.” That’s combined with a 0.23 Bcf/d production decline from Texas and the Northeast.

“While we have been noting some of these latter production drops are related to pipeline maintenance, the bulk of them are not as well known since they tend to be producer-driven, field-level projects that do not report on a timely basis,” he said. “This is very common for this time of year when a lull in shoulder season demand softens prices.”

Turning to the spot market, most regional averages saw changes of less than a nickel as forecasts call for demand to begin easing this week after lingering spring cold drove higher prices earlier this month.

OPIS PointLogic expects demand for the current week ending April 26 to average 62.4 Bcf/d, down from 70.4 Bcf/d for the week before, according to Vice President Jack Weixel. The decline is led by residential/commercial (res/com) demand, which is expected to average 18.1 Bcf/d for the current week after reaching 26.4 Bcf/d last week.

“Compared to April 2017, April 2018 demand is a startling 10.6 Bcf/d higher, with most of that gain attributed to colder weather maintaining a seasonally unusual level for res/com gas usage,” Weixel said. “The week ending May 3 will see a continued drop in demand, with total demand down to 57.2 Bcf/d, as res/com demand drops another 4.7 Bcf/d.

“Population-weighted temperatures across the U.S. Lower 48 will jump by nearly 3 degrees week on week as the Midcontinent region in particular earns a reprieve from the cold temperatures it’s seen all month.”

In Louisiana, Henry Hub tacked on 3 cents to $2.77.

According to Genscape analyst Josh Garcia, “Feed gas deliveries to” Cheniere Energy Inc.’s Sabine Pass liquefied natural gas export terminal “fell to 2.06 Bcf/d” as of timely cycles for Tuesday’s gas day, “with the biggest cut coming from Creole Trail due to Tetco performing a one-day maintenance event on their side of the Gillis interconnect.

“Aggregate feed gas deliveries have fallen 0.96 Bcf/d in two days and are 1.2 Bcf/d less than the 30-day max.”

A system bringing showers and thunderstorms to the Southeast Tuesday was expected to track into the East Tuesday night and Wednesday, according to’s one- to seven-day outlook.

“A second colder system” was making its way “out of the Rockies and into the Plains” Tuesday, “then into the South Wednesday to Thursday,” the firm said. “Overall, most of the country will be mild to warm with highs of 60s to 80s apart from the cooler Rockies and North Plains with 40s and 50s.

“With mostly comfortable conditions this week, national demand will be near normal through Thursday, then slightly stronger than normal this weekend due to showers and cooling sweeping across the Ohio Valley and Northeast.”

A few Rockies points gained by double digits Tuesday. Opal added 13 cents to $2.05.

In California, SoCal Citygate dropped 86 cents to $3.52. The decline came after average prices there spiked $2.13 day/day Monday.

According to Genscape analyst Joseph Bernardi, an unplanned maintenance event was expected to cut around 250 MMcf/d of import capacity on the Southern California Gas Co. (SoCalGas) system Tuesday and Wednesday.

“A valve repair on Line 4000 will limit firm operating capacity at the Needles interconnects to zero” for the two days, Bernardi said. “These two points averaged a receipt of 256 MMcf/d in the past month, essentially all of which came via Transwestern.” The spike at SoCal Citygate Monday was “likely both in response to this new maintenance and to upstream demand competition with hot weather hitting the Desert Southwest.”

According to the SoCalGas website, the utility’s total estimated system receipts were down from just over 2.5 Bcf/d Monday to a little under 2.3 Bcf/d Tuesday and Wednesday.

SoCal Border Average climbed 15 cents to $2.21, while El Paso S. Mainline/N. Baja jumped 21 cents to $2.21.