- Forecasts called for light heating demand
- LNG feed gas volumes tampered off
- Analysts anticipate a light storage withdrawal
Natural gas futures on Tuesday finished in the red for a fifth consecutive session, as traders mulled forecasts for light heating demand, a leveling off of liquefied natural gas (LNG) levels and early expectations for a light storage withdrawal.
The April Nymex contract declined two-tenths of a cent day/day and settled at $2.662/MMBtu. May declined by an equal amount and closed at $2.696.
NGI’s Spot Gas National Avg. shed 3.0 cents to $2.470.
LNG feed gas volumes topped 11 Bcf at the close of trading last week, NGI data showed, hovering near record levels and representing what market participants thought was a full recovery from the disruptions caused by the Texas freeze in mid-February. However, over the weekend and into Monday and Tuesday, LNG levels dipped below 11 Bcf, and on Wednesday, they declined to 9.83 Bcf during the trading session.
NatGasWeather said the combination of “a bearish trend” on the LNG front with forecasts for warmth and minimized heating needs hampered markets.
In addition to above average temperatures this week, “the overnight weather data held milder trends for early next week over the eastern half of the U.S.,” the firm said.
Cooler air is expected to return late next week only to quickly fade by the start of the following week. “Overall, swings in national demand every few days from very light this week, moderate this weekend on cold shots into the northern and central U.S., back to light early next week, moderate late next week, then back to light March 21-23,” NatGasWeather said.
With “very light demand this week and the 13-16 day forecast again looking mild, the pattern is slightly bearish overall,” the firm added.
Last week’s surprise Energy Information Administration (EIA) inventory report, coupled with expectations for a modest pull with the agency’s report on Thursday, added to the demand concerns pressuring futures, analysts said.
EIA reported a withdrawal of 98 Bcf for the week ended Feb. 26. Markets had expected a triple-digit storage build in the 130s-140s Bcf.
The end-of-season storage estimate from Energy Aspects swelled to 1.6 Tcf from 1.57 Tcf following last week’s “anemic” EIA inventory report. “Part of the looser balances is likely that Lower 48 production is back above early-February baselines, thanks to flush production as wells are turned online after the freeze-offs” in Texas.
Looking ahead to this week’s EIA report, the firm issued a preliminary estimate for a 61 Bcf withdrawal for the week ended March 5. “A 5.7 Bcf/d week/week jump in production — to above pre-freeze levels — as well as lesser heating demand…will drive the lower rate,” according to Energy Aspects.
A preliminary Bloomberg survey found withdrawal estimates ranging from 68 Bcf to 84 Bcf and a median of 76 Bcf.
EBW Analytics Group said a potential resurgence in wind power generation this spring may loom as another detriment to natural gas demand.
Year-to-date, EBW said Tuesday, Electric Reliability Council of Texas (ERCOT) data showed wind generation down 2.0% from the same period a year earlier, largely because of output declines caused by the frigid mid-February conditions.
“When wind resource increases, generation may surprise the market to the upside,” the EBW analysts said. “If this potential burst of wind generation coincides with a greater-than-expected shoulder seasonal downturn in electricity demand, the call on gas-fired generation could plummet, putting the market at an elevated risk of steep seasonal declines in power sector gas burn.”
On a brighter note for gas prices, EIA on Tuesday boosted its projected 2021 Henry Hub spot price average to $3.14/MMBtu. The updated outlook, included in the agency’s latest Short-Term Energy Outlook, marked a substantial increase from its previous forecast for a $2.95 average. EIA noted the surge in cash prices amid the Texas deep freeze in February as the catalyst for the increase.
Cash Prices
Spot gas prices on Tuesday, however, fell for a fourth-straight day as spring weather further dampened demand.
Forecasters said much of the Lower 48 will experience mild to warm temperatures through most of the trading week, with highs of 50s and 60s in northern states and 60s to 80s throughout much of the South.
Colder air is expected in the Rockies and Plains Friday, bringing lows in the teens, with the potential to push into the Great Lakes and Northeast over the weekend. Still, milder temperatures are expected by early next week, with highs of 50s to 70s over the eastern half of the country.
On Tuesday, rising temperatures in the Northeast were the biggest detriment to heating demand, according to AccuWeather senior meteorologist Alex Sosnowski.
“The warmest weather in months — since last November in many locations — began building across the northeastern United States Tuesday,” Sosnowski wrote in an outlook report. Highs ranged from the 50s to 70s across the region.
“The springlike pattern will last into Friday and offer plenty of sunshine for those hoping to soak up the milder weather and see any remaining snow from the big storm a month ago melt away,” he added.
Algonquin Citygate fell 10.5 cents day/day to average $2.740, while Tenn Zone 6 200L shed 30.0 cents to $2.610.
In Appalachia, Dominion North fell 11.5 cents to $2.105.
Prices were mixed throughout the nation’s midsection, with Chicago Citygate down 2.5 cents to $2.425 and Transwestern in Texas up 7.0 cents to $2.295.
Out West, SoCal Citygate advanced 12.0 cents to $3.340.
On the pipeline from, Columbia Gas Transmission (TCO) on Tuesday began planned pigging maintenance on its MXP Line in West Virginia. The work was slated to culminate by Friday, Wood MacKenzie analyst Anthony Ferrara.
Capacity through TCO’s MXPSEG MA42 throughput meter is set to be reduced to between 1,553 MMcf/d and 1,670 MMcf/d on Wednesday and Thursday, Ferrara said. “Over the past 30 days, MXPSEG MA42 has averaged 1,948 MMcf/d and maxed at 2,132 MMcf/d, translating to potential flow cuts of up to 579 MMcf/d.”
"gas" - Google News
March 11, 2021 at 12:43AM
https://ift.tt/2Oed34e
Momentum Proves Elusive for April Natural Gas Futures - Natural Gas Intelligence
"gas" - Google News
https://ift.tt/2LxAFvS
https://ift.tt/3fcD5NP
Bagikan Berita Ini
0 Response to "Momentum Proves Elusive for April Natural Gas Futures - Natural Gas Intelligence"
Post a Comment