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James Hyerczyk
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Natural Gas

Natural gas futures are inching lower on Thursday, following through to the downside after posting a minor reversal top the previous session. Sellers were reacting to the spread of milder temperatures across key demand areas and increased production, while steady LNG feed gas volumes provided some support. Position-squaring ahead of today’s U.S. government report may be contributing to the selling pressure.

At 13:05 GMT, April natural gas futures are trading $2.787, down $0.029 or -1.03%.

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Short-Term Weather Forecast

According to NatGasWeather for March 4 to March 10, “A mild weather system with showers will track across the Southwest with showers. The rest of the U.S. will be dry and mild with highs mostly in the 50s to 70s besides 30s and 40s across the far northern U.S. A fresh cold shot will sweep across the East Friday – Sunday with chilly lows of 10s to 30s and highs of 30s and 40s for strong demand, although countered by mild to warm conditions over much of the rest of the U.S. with highs of mid-40s to 70s. Upper high pressure will rule much of the U.S. next week with widespread highs of 50s to 80s for light demand besides the slightly cool and unsettled West.”

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Energy Information Administration Weekly Storage Report

The U.S. EIA is scheduled to release its weekly storage report at 15:30 GMT on Thursday.

Natural Gas Intelligence (NGI) is reporting that a Bloomberg survey found withdrawal estimates ranging from 134 Bcf to 162 Bcf, with a median 148 Bcf decrease. A Reuters poll found pull estimates spanning from 93 Bcf to 150 Bcf and a median estimate for a 135 Bcf decline in stocks.

A Wall Street Journal poll, meanwhile, landed at an average withdrawal 144 Bcf, with estimates ranging from decreases of 117 Bcf to 162 Bcf.

NGI’s model estimated a 135 Bcf withdrawal for the week-ended February 26.

The estimates compare with a 72 Bcf pull in the same week a year earlier and a five-year average decline of 89 Bcf, according to EIA.

Daily Forecast

“The natural gas storage comparison versus the five-year average has tightened by a startling by a startling 405 Bcf over the past four weeks – from a 244 Bcf surplus to a 161 Bcf deficit – and the deficit may surpass 225 Bcf” after Thursday’s storage report, EBW Analysts said.

“Over the next three weeks, however, the trajectory of the storage comparison versus the five-year average may flatten” as temperatures rise and heating demand fades, the EBW analysts said.

For a look at all of today’s economic events, check out our economic calendar.

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