Spot natural gas prices weakened from Feb. 6-10 as temperatures thawed considerably following an early-February Arctic blast. Though pockets of chilly weather remained, losses upward of $20 in the Northeast drove NGI’s Weekly Spot Gas National Avg. down $3.570 to $2.685.

Nymex natural gas futures, meanwhile, ticked up a few cents throughout the period as traders tried to establish a floor for a market staring down mostly bearish fundamental factors in the near term. With hints in the weather data that frigid air may return to the Lower 48 late in the month, the March Nymex futures contract settled Friday at $2.514, up 5.7 cents from Monday’s close.

Most of the Lower 48’s cash markets seemingly took a breather after the prior week’s weather-induced volatility, but a few markets continued to see big changes throughout the week. Most notably was the Northeast, where Winter Storm Mara unleashed some of the most frigid weather in years and sent prices soaring to levels that put the West Coast to shame.

After prices in New England soared above $200 in some locations last week, spot gas topped out at $7 this week. Tenn Zone 6 200L cash plunged $25.720 on the week to average $3.005. Transco Zone 6 NY dropped a more moderate $8.165 to $2.150.

Losses upstream in Appalachia were even more subdued. Leidy Hub fell 87.5 cents on the week to average $2.200, while Eastern Gas South dropped 47.5 cents to $1.945.

West Coast markets posted price decreases of several dollars, even as winter storms continued to move across the region. Cash action was relatively muted as prices remained well under $10 throughout the week.

Most other U.S. locations slid less than 50.0 cents week/week, with spot gas trading mostly in the $2.00 range.

Have Futures Bottomed?

Natural gas futures notched four days in the black this week, a considerable feat given a barrage of bearish influences in the market, including weather.

With only brief periods of frigid air penetrating the Lower 48 since November, gas demand for heating has been rather uninspiring this season. As a result, storage inventories have not fallen as much as they would in a normal winter, and stocks are trending well above historical levels with the spring shoulder season quickly approaching.

On Thursday, the latest government natural gas inventory data provided some indication that the supply/demand balance was tightening.

The Energy Information Administration (EIA) said stocks for the week ending Feb. 3 fell by a steep 217 Bcf. For the third week in a row, the draw surprised to the high side.

The biggest miss occurred in the South Central region, where the market withdrew a massive 74 Bcf from storage, according to EIA. This included a 26 Bcf draw from salt facilities and a 48 Bcf draw from nonsalts.

Mobius Risk Group noted that the weather pattern during the most recent reference period was similar to that of late December, when Winter Storm Elliot swept across the nation and slashed production. But this time around, though, salts fell 26 Bcf lower week/week. This is a 5 Bcf larger withdrawal than what was reported back in December.

“The relevance of this data point is both a reference to the directional improvement and the absolute level,” Mobius natural gas analyst Zane Curry said. “The last two weeks have seen salt storage fall by 39 Bcf, which helps to offset the prior three-week period when 40 Bcf was injected.”

Overall salt storage sits at 271 Bcf, which is 61 Bcf more than the same week last year, but a more modest 35 Bcf surplus to the five-year average, according to EIA. As a result of the incredibly mild January, salt storage went from a five-year minimum at the end of 2022 to near the five-year max by mid-January, data show.

“Opening space up in this key storage asset class is vital in respect to downside risk in the fall,” Curry said.

That said, the long-awaited return of Freeport LNG may help the demand side of the equation. After being shut down since June following an explosion, the liquefied natural gas terminal received approval this week to load ships at one of the three docks at the site. Although the approval wasn’t for a full restart, one vessel had docked on Friday and another was set to arrive on Saturday.

EBW Analytics Group said loading LNG cargoes is intended to clear out remnant onsite storage to open space for renewed operations. The firm continues to target the 30- to 45-day timeframe for a full restart.

“Freeport remaining offline – and the risk of further hiccups and delays in returning to full operations – remains a key near- to medium-term bearish risk for natural gas prices,” EBW senior energy analyst Eli Rubin said. “If Freeport fully returns in March, however, it could take the bearish risk off the table and potentially enable beaten down natural gas to establish a bottom.”

Northeast Cash Rallies

With heavy wet snow on the way to Appalachia, spot natural gas prices strengthened in Friday trading.

The National Weather Service (NWS) said a low pressure system moving eastward across the lower Great Lakes would continue to deliver mixed precipitation across northern New England and heavy snow across northern Maine. As the low pressure system slides eastward and moves into the Canadian Maritimes, the mixed wintry precipitation is expected to taper off and change over to light snow.

NWS forecasters said the snow would linger a bit longer downwind from the lower Great Lakes before drier air arrives from the west over the weekend. Cooler temperatures behind the front should be ushered into the eastern United States as well, but temperatures would likely remain above normal by February standards.

With the cooler weather ahead, Algonquin Citygate cash jumped 43.0 cents day/day to $2.755 for gas delivery through Monday, while Transco Zone 6 non-NY ticked only 2.5 cents higher to $2.070.

In Appalachia, price gains were similarly modest. Eastern Gas South edged up a penny to $1.910.

Prices out West were mostly higher amid a stormy winter pattern moving through the region. CIG cash slipped 2.0 cents to $2.245, while Northwest Wyoming Pool climbed 24.5 cents to $4.965.

In California, SoCal Citygate prices jumped 48.0 cents to $6.025. With trades as high as $6.100, these were the highest prices seen across North America.