Natural Gas Price Fundamental Daily Forecast – LNG Demand May Be Preventing Lower Prices

Natural gas futures are trading slightly better shortly after the regular session opening on Monday as bearish weekend weather forecasts took a little wind out of the sail of Friday’s strong performance.

According to EBW Analytics Group, “Further, after holding up reasonably well over the weekend, weather-driven demand is about to take another significant step lower, leading to small net injections into storage on most days and putting downward pressure on cash prices.”

Bespoke Weather Services in its latest forecast early Monday said the weather picture was as bearish “as it can be at this time of the year.”

At 14:56 GMT, May natural gas futures are trading $2.579, up 0.013 or +0.51%.

While projected temperatures for the balance of March remained mostly unchanged compared to earlier expectations, “we are seeing more evidence confirming our view that April also at least starts out quite warm, a trend that we expect to continue as we move forward,” Bespoke said.

“That is not the pattern we see, however, as it looks to run broadly warm across most areas of the nation,” Bespoke said. “…We suspect the run of warmth continues into summer, though this does not become bullish until May.”

Short-Term Weather Outlook

According to NatGasWeather for March 22 to March 28, “One weather system will bring showers to the Northwest Monday, while a second brings showers and thunderstorms to the Southern Plains, but both mild with highs of 40s and 60s. The southern U.S. will be nice this week with highs of 60s to 80s, while warmer than normal with highs of 50s and 60s across the Great Lakes and Northeast to aid and light national demand. The Southern Plains system will track towards the Great Lakes mid-week for local cooling, although it won’t be until next weekend when weather systems over the west-central U.S. advance more aggressively into the eastern U.S. for more seasonal temperatures and demand.”

Daily Forecast

Putting a lid on prices is the weather, but underpinning prices is likely the strong demand for liquefied natural gas (LNG). On Friday, EBW Analytics Group CEO Andy Weissman noted LNG feed gas volumes reached 11.8 Bcf on Friday – near a record high. He cited “rebounding demand” at the Sabine Pass and Corpus Christi terminals as U.S. exporters fully recovered from interruptions caused by the Arctic freeze in Texas last month.

“Further demand gains are possible – perhaps even eclipsing 12.0 Bcf/d if all terminals achieve maximum demonstrated demand levels at the same time.”

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