Markets

March natural gas is set to open 2 cents lower Tuesday morning at $2.92 as traders confront a new set of forecasts showing still milder weather conditions. Overnight oil markets rose.

Potential drought-busting rain and snow falls in California and the greater West Coast are offering the possibility of substantial above-normal hydroelectric supplies for the spring and summer, which could dampen natural gas requirements for thermal power generation in the region.

Weakness on the demand front continued to erode not only near-term physical, but also financial natural gas prices on Tuesday.

Physical natural gas for Tuesday delivery was relatively unfazed Monday as gains in the Northeast were largely dominated by pricing throughout the country a few pennies either side of unchanged. The NGI National Spot Gas Average rose 3 cents to $2.85.

March natural gas is set to open 7 cents lower Monday morning at $2.96 as weather models over the weekend turned sharply warmer near term and forecast heating requirements were slashed. Overnight oil markets fell.

A massive increase in natural gas pipeline capacity from Appalachia is poised to hit the market over the next couple of years, which when combined with a likelier looser federal regulatory environment, may temper Henry Hub prices in 2018 and beyond.

Oil and natural gas production from the nation’s seven most prolific unconventional plays will continue to edge higher in March, a third consecutive month of increases following an extended downturn, according to data from the Energy Information Administration (EIA).

March natural gas is expected to open a dime lower Friday morning at $3.04 as more deferred weather forecasts moderate further. Overnight oil markets rose.

Part of the fallout from last year’s prolonged methane leak at the Aliso Canyon underground natural gas storage facility seems to be a growing distrust of natural gas as an energy source.