A stronger weather-driven demand setup to close out the heating season had natural gas futures probing higher in early trading Tuesday. The April Nymex contract was up 13.1 cents to $5.031/MMBtu at around 8:45 a.m. ET.
Recent runs of the major weather models showed cooler trends for the late-winter period as of early Tuesday, including an overnight heating degree day (HDD) increase from the American Global Forecast System (GFS), according to NatGasWeather.
“National demand will increase this weekend into next week as colder weather systems out of southern Canada advance into the northern U.S.,” NatGasWeather said. The European model “brings additional cool weather systems into the northern U.S. March 30-April 3 for continued seasonal demand, while the GFS sees a little less cold air,” making it “several HDD warmer comparatively.”
Overall, the firm characterized the latest weather picture as “closer to seasonal” for days five through 15, as opposed to “leaning bearish.”
Maxar’s Weather Desk similarly made cooler changes to its latest forecast Tuesday for the six- to 10-day period (Sunday through March 31).
“The forecast trends cooler from the Midwest to the East,” Maxar said. “The changes are associated with high pressure being pulled southward during the early half, with its Canadian origins supportive of below to much below normal temperatures.”
The firm’s latest 11-15 day forecast (April 1-5) also showed cooler trends from the Midwest to the East.
“Low pressure is projected to track through the middle latitudes of the U.S. over the course of the period, with above-normal temperatures favoring areas to the south of the storm track,” Maxar said.
The strengthening late-winter demand outlook might prove adequate to lift natural gas above the psychological $5/MMBtu level it has been “flirting with” in recent trading, according to EBW Analytics Group analyst Eli Rubin.
Still, “natural gas supply continues to increase as milder weather enables restoration of production,” Rubin said. “Intra-month trends also tend to favor higher pipeline nominations towards the end of the month, suggesting possible further gains over the next seven to 10 days.”
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March 22, 2022 at 08:07PM
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Natural Gas Breaches $5/MMBtu Mark Early as Late-Winter Demand Builds - Natural Gas Intelligence
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