In a stretch of trading defined by a barrage of chilly weather systems, weekly cash prices consistently gained ground amid steady heating demand across much of the Lower 48.
NGI’s Weekly Spot Gas National Avg. for the April 12-16 period climbed 24.5 cents to $2.495, with cash prices advancing four of the trading week’s five days.
The May Nymex natural gas futures contract, meanwhile, also forged ahead and settled at $2.680/MMBtu to close the trading week, up 6% from the prior week’s finish. Futures finished up at the close of four of the week’s five trading sessions as well.
Chilly conditions moved in early and hung around for the week across much of the eastern half of the United States, with lows in the 20s in some regions, driving solid demand.
“I think we could get more out of this cool April – maybe another dime or so” for the national average, Thomas Saal, senior vice president of energy at StoneX Financial Inc., told NGI.
Indeed, forecasters anticipate seasonally strong demand through the week ahead as well.
“Several colder than normal weather systems will track across the U.S. over the next week with rain, snow and chilly lows of 20s to 40s for strong national demand,” NatGasWeather said.
The firm said it would be coldest over the Rockies, Midwest and the interior Northeast.
Natural gas futures started the week with back-to-back gains on Monday and Tuesday, as liquefied natural gas (LNG) levels were robust – above 11 Bcf/d – and exports to Mexico maintained momentum and complemented favorable weather-driven demand.
Futures moved sideways on Wednesday, as markets paused ahead of the weekly government inventory data. Traders ultimately took some profits ahead of the report and the prompt month finished down a tenth of a cent on the day.
But on Thursday, the front month quickly rebounded following a bullish U.S. Energy Information Administration (EIA) storage report.
EIA reported an injection of 61 Bcf into natural gas storage for the week ending April 9. That was below median estimates and the year-earlier injection of 68 Bcf.
The injection was “on the low end of the range of all market estimates,” Bespoke Weather Services said. “In our models, this is a strong number, confirming the tightening of balances we have been seeing over the last few weeks.”
NGI forecasted an injection of 67 Bcf for the period.
The latest build lifted inventories to 1,845 Bcf, below the year-earlier level of 2,087 Bcf and roughly in line with the five-year average of 1,834 Bcf.
Exports were the bright spot behind the bullish miss and remain so heading into the back half of April, analysts said. LNG feed gas volumes have consistently held near or above 11 Bcf/d this spring, and exports to Mexico recently topped 7 Bcf/d. Both approached record levels in the past week.
It is “hard not to like the rate of change on the gas macro, as exports are materially outperforming our expectations while supply retreats from recent highs,” analysts at Tudor, Pickering, Holt & Co. (TPH) said Friday.
Degree days during the week covered in the latest EIA report period came in 22% below the five-year average, according to TPH. “However, with forecasts turning cooler and exports running hot we’re expecting some tight prints to close out April,” the TPH team said.
NGI’s Spot Gas National Avg. slipped 2.0 cents to $2.545 on Friday for weekend through Monday delivery, marking its first decline in an otherwise strong week for cash prices.
On Friday, highs in the 40s stretched across swaths of the Midwest, while areas of the Northeast endured wet and even cooler conditions. Boston, for example, was doused with steady downpours and high temperatures hovered in the 30s, National Weather Service data showed.
Prices across the midsection of the Lower 48 continued to rise Friday. Chicago Citygate climbed 8.5 cents day/day to average $2.640, while OGT advanced 21.0 cents to $2.520 and El Paso Permian picked up 9.5 cents to $2.555.
While weather was in their favor, Northeast prices retreated on Friday after a week of inflation. Prices on average in the region were down more than 20 cents. Algonquin Citygate near Boston shed 30.5 cents to $2.865.
Temperatures were comfortable in the West, with highs in the low 70s in Southern California and upper 70s in the Southwest, diminishing demand.
On the pipeline front, starting Sunday and continuing until Tuesday, Creole Trail Pipeline said it would perform maintenance at its Gillis Compressor Station. Operational capacity was expected to fluctuate between roughly 1.2 Bcf/d and 1.45 Bcf/d throughout the event, according to Wood Mackenzie analyst Preston Fussee-Durham.
“Most notably, the largest impact is to be observed on Monday,” he said, “when operational capacity on the pipeline will be reduced to approximately 1.19 Bcf/d – a curtailment of near 0.3 Bcf/d of pipeline throughput capacity.”
However, Fussee-Durham added Friday, “over the past week, observed feed gas deliveries from Creole Trail Pipeline to Sabine Pass liquefaction facilities has only averaged 1.33 Bcf/d, with single-day maximum observed deliveries of 1.42 Bcf/d. As a result, impacts on the order of approximately 0.23 Bcf/d could be observed” on Monday, “with negligible impacts” on the other days.
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