Markets

U.S. natural gas merchants are catching up to the traditional Canadian champions of international trade in North American production, according to the latest trade scorecard compiled the United States Department of Energy (DOE).

The expiring March natural gas contract is set to open 3 cents higher Friday morning at $2.65 as traders note a nominal increase in heating load in the near term. Overnight oil markets fell.

Worldwide liquefied natural gas (LNG) supply appeared to swamp demand in 2016 as new capacity came online, but big buyers snapped up more cargoes and new participants emerged, basically evening out the supply-demand picture, according to Royal Dutch Shell plc.

Not even a larger-than-expected withdrawal from storage was enough to soften the blow of a more than 20-cent drop in March natural gas forwards prices as the main focus remains on weather, or the lack thereof.

Weekend and Monday deals for physical natural gas were a tough sell in Friday trading, although some modest strength was seen at New England, Mid-Atlantic, and Appalachian points.

It may have been a short four-day trading week, but that didn’t deter the weather bears from seizing full control and sending weekly natural gas quotes tumbling.

March natural gas is expected to open 10 cents higher Thursday morning at $2.69 as weather forecasts reverse the recent trend of ever-milder outlooks. Overnight oil markets jumped.

Natural gas futures stayed within opening ranges Thursday morning after the Energy Information Administration (EIA) reported a storage withdrawal that was greater than what the market was expecting.

As basis differentials erode with new pipeline expansions and reversals coming online, 2017 could see capacity markets shift to increasingly shorter- or longer-term trades, according to new analysis from Skipping Stone and Capacity Center.