Natural Gas Price Fundamental Daily Forecast – Traders Responding to Weather, Key Pipeline Work

Natural gas futures are trading slightly higher on Wednesday. Oversold conditions and some light speculative buying around the psychological $2.500 level is helping to generate the early upside bias. On Tuesday, prices plunged after traders ignored forecasts for a few days of cooler temperatures, and a big drop in flows to a Gulf Coast liquefied natural gas (LNG) facility.

At 14:15 GMT, June natural gas is trading $2.513, up 0.015 or +0.56%.

According to Genscape, Inc., “It was news that feed gas deliveries to the Corpus Christi LNG export facility in South Texas had dropped off precipitously that likely sent futures prices crashing. Corpus Christi Pipeline began maintenance Tuesday at its Sinton Compressor Station, which will cut all flows along the pipeline and effectively shut in the line for the duration of the two-day event.”

“Given that the Corpus Christi Pipeline will be unable to flow gas, we expect a stoppage of liquefaction operations at the Corpus Christi LNG facility during this maintenance.”

Short-term Weather Outlook

According to NatGasWeather for April 24 to April 30, “Mild to warm conditions will dominate the US with highs of mid-60s to 80s for very light national demand. There will be slightly cooler exceptions across the far northern US where highs will be in the 50s to 60s. A weather system will bring heavy showers to the south-central US/Texas and Mississippi Valley the next few days, although still warm with highs of 60s and 70s. Stronger cooling is expected across the northern US this weekend through early next week for an increase in national demand as highs drop into the 50s and lower 60s locally 40s. Overall, national demand will be low to very low through Friday, then moderate.”

Mid-term Weather Outlook

NatGasWeather sees colder trending weather systems/cool shots across the northern U.S. this weekend and into early next week, “However, warming will return across the Great Lakes and Northeast May 1-7 with near-perfect temperatures of mid-70s to lower 80s from Chicago to New York City, making for very light demand. The southern United States, meanwhile, will be quite warm most days through May 10, maintaining some needs for cooling, but far from impressive with national CDDs running less than 4/day.”

Energy Information Administration Weekly Storage Report

Traders are looking for this week’s EIA report to show a build of 90 Bcf. However, given this week’s “near perfect” temperatures and very light national demand, next week’s storage build could possibly exceed 120 Bcf. After that, the next three storage reports could average 105-112 Bcf.