As another unseasonable storage result loomed, threatening to further expand an already huge inventory surplus, natural gas futures retreated through midday trading Wednesday. Meanwhile, with snow in the forecast for the Northeast, spot prices there rallied.
Here’s the latest:
- April Nymex contract down 5.1 cents to $1.693/MMBtu as of 2:09 p.m. ET
After going as high as $1.765 earlier in the session, the front month swiftly dropped a nickel or so starting around 9 a.m. ET. The extent of excess supplies exiting the winter appeared to outweigh any uplift from modest late-season cold.
- Latest storage report could land on net injection as surplus set to grow
- NGI modeling 9 Bcf injection, versus five-year average 42 Bcf withdrawal
- Total Lower 48 storage at 2,325 Bcf, 629 Bcf above five-year average, EIA data show
Ahead of the U.S. Energy Information Administration’s (EIA) inventory report Thursday, some analysts are anticipating a net injection into Lower 48 stocks for the week ended March 15. Snapper Creek Energy analyst Kyle Cooper called for an 8 Bcf build, including a 23 Bcf injection for the South Central region. Gelber & Associates analysts predicted a 1 Bcf withdrawal. “The oversupply evident in fundamental market metrics is playing a heavy hand in driving market sentiment, and analyst predictions for the EIA’s weekly storage report tomorrow indicate such oversupply should continue,” the Gelber analysts said.
- Freeport LNG confirms maintenance could impact Trains 1 and 2 off-and-on through May
Spokesperson Heather Browne said Wednesday that Train 2 at the Texas export facility was currently offline and that Train 1 “will be taken down imminently.” Train 3 has shown signs of returning to action after being out since January. The operator determined “it would be prudent to take proactive steps to inspect our other two trains,” according to Browne. Pipeline flows to Freeport totaled roughly 900,000 Dth for Wednesday, up around 100,000 Dth/d versus week-earlier levels, data from NGI’s LNG Export Tracker show.
- Global Forecast System weather model seen warmer midday
The model was on track to drop close to 10 heating degree days from the outlook, primarily by “showing not quite as much cool air into the northern and central U.S. March 29-April 3,” according to NatGasWeather. The pattern for early April was shaping up to be “not nearly cold enough” from a natural gas demand perspective, the firm said.
- Cash price action mixed, with Henry Hub down a penny to $1.565, per NGI’s MidDay Price Alert
- Northeast Regional Avg. rallies 60.0 cents to $2.230 on weather
The National Weather Service on Wednesday called for snow over the Interior Northeast and New England. Meanwhile, physical prices eased lower Wednesday across the western Lower 48, MidDay Alert data show. SoCal Citygate gave up a penny to fall to $1.510.
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