Natural Gas Price Fundamental Daily Forecast – Supported Ahead of EIA Report as LNG Exports Top 11 Bcf

Natural gas futures are trading slightly lower late in the session on Wednesday, while holding in the same range for a third straight day. Traders said that mild weather conditions and light heating demand are keeping a lid on prices, while surprise strength in liquefied natural gas (LNG) underpinned prices. Volume was subdued as traders squared positions ahead of Thursday’s Energy Information Administration weekly storage report.

At 18:05 GMT, May natural gas futures are trading $2.572, down $0.025 or -0.96%.

LNG Export Volumes Trending Higher

LNG export volumes topped 11 Bcf for the fourth time in five days, hitting 11.58 Bcf on Tuesday, according to Natural Gas Intelligence (NGI) estimates. Analysts said Asian demand for U.S. supplies of the super-chilled fuel continue to prove strong, supporting a recovery to near record levels after delivery interruptions caused by the Texas deep freeze in February, NGI wrote.

“LNG feed gas has been strong,” NatGasWeather said.

Short-Term Weather Outlook

NatGasWeather analysts also said weather forecasts for the final third of March continued to show warmer temperatures and weakening demand for natural gas to run furnaces – the principal reason futures have struggled to get into positive territory this month.

“The overnight data failed to trend any colder and remains quite bearish” from Sunday (March 21) through March 29, NatGasWeather said Tuesday. The data “maintained moderate demand early and late this week” but “exceptionally comfortable” temperatures “for the start of spring, with highs over most of the U.S. March 21-29 reaching the 50s to 80s.”

EIA to Report Small Withdrawal

Thursday’s U.S. Energy Information (EIA) storage report is expected to show a small withdrawal. Energy Aspects posted a preliminary estimate for a 25 Bcf withdrawal for the week ending March 12.

“Mild weather will see the withdrawal moderate as the heating season sputters to an end,” the firm said.

NGI is reporting that a preliminary survey by Bloomberg found estimates ranging from draws of 14 Bcf to 17 Bcf and a median forecast for a 19 Bcf decrease in underground stocks.