Natural gas futures were down sharply in early trading Monday, pressured by a warmer weather outlook and production coming back online following last week’s cold-related disruptions. The March Nymex contract was down 13.8 cents to $2.931/MMBtu at around 8:50 a.m. ET.

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Forecasts trended warmer over the weekend, showing a warmer than normal pattern for early March, according to Bespoke Weather Services. The warmer outlook is a result of a “strong” positive Eastern Pacific Oscillation combined with “less negativity” in the North Atlantic Oscillation, the firm said.

“Of course, weather is not the only focus of the market, as we needed to see how quickly production would come back, and it is returning rather rapidly, though it does remain a few Bcf off the levels from prior to the big cold snap,” Bespoke said. “We suspect it will continue its recovery this week.”

Still, even with production coming back online, analysts at Tudor, Pickering, Holt & Co. (TPH) said early Monday they’re expecting “some extra tightness” in the market to start the week.

“The arctic air has faded, but the impacts continue to linger…with demand appearing to recover quicker than supply,” the TPH analysts said. “…Latest data show supply now sitting at 85 Bcf/d, up from the lows of 70 Bcf/d but still around 5 Bcf/d below pre-storm levels of around 90 Bcf/d.”

Canadian imports have increased to help make up for the lost production, but overall supply remained at a net 4 Bcf/d deficit as of early Monday, according to TPH estimates.

In terms of demand, liquefied natural gas feed gas demand totaled 8.6 Bcf/d in TPH’s latest estimates, “up from a low point of around 1.5 Bcf/d but still 2.5 Bcf/d shy of nameplate.” Exports to Mexico were still about 1 Bcf/d below levels prior to the arctic blast, resulting in a net impact to demand of 3.5 Bcf/d.

“Putting all the pieces together, this suggests lingering storm impacts equate to around 1.5 Bcf/d of incremental tightness for a market we already estimate is undersupplied by about 3 Bcf/d,” the TPH analysts said. The firm’s latest modeling showed storage exiting March about 16% below five-year norms, with a projected end-of-injection season peak total of just 3.1 Tcf under current strip pricing.

Meanwhile, traders will also have to account for potential price impacts from what could be a very large reported storage withdrawal from the Energy Information Administration following last week’s deep freeze, according to Bespoke.

“In theory, downside should be rather limited from here, given that we appear set to end winter with much less in storage than was expected just a few weeks ago, but this week’s number is very tricky with all the issues in play last week,” the firm said.

Early estimates, including from Bespoke, have pointed to a withdrawal greater than 300 Bcf for the week ending Feb. 19.

March crude oil futures were up 88 cents to $60.12/bbl at around 8:50 a.m. ET, while March RBOB gasoline was off fractionally to $1.8024/gal.