Natural Gas Price Fundamental Daily Forecast – Midpoint Forecasts Call for 18 Bcf Draw in Today’s EIA Report

Natural gas futures are inching lower on Thursday shortly before the release of the government’s weekly storage report at 14:30 GMT. The report is expected to show a small withdrawal. Meanwhile, the market continues to feel pressure from forecasts calling for mild Spring-like temperatures and lower demand expectations. Firm LNG exports may be slowing down the selling pressure, but they haven’t been strong enough to offset the bearish news.

At 11:53 GMT, May natural gas futures are trading $2.536, down $0.019 or -0.74%.

According to Natural Gas Intelligence (NGI), Bespoke Weather Services noted strength in LNG volumes, steadied production levels and stable or improving power burns over the last several days given lower gas prices. All could support a brighter fundamental picture, the firm said, but broadly stronger weather-driven demand may still be needed to drive a sustained rally.

Short-Term Weather Outlook

According to NatGasWeather for March 18-24, “A weather system will bring areas of rain to the east-central/eastern U.S. today and Friday with highs of 30s to 50s. It will be mild to warm over the rest of the country with highs of 40s to 60s across the Midwest and Great Lakes and 60s to lower 80s from South Texas to the Southeast.

A colder weather system will track into the Northeast Friday while merging with the east-central U.S. system for a bump in national demand. However, light national demand is expected late this weekend and next week as high pressure rules the southern and eastern ½ of the country with comfortable highs of 50-80s, while slightly cool and showery over the West with highs of 40s to 60s. Overall, moderate national demand this week, then light late this weekend into next week.”

Energy Information Administration Weekly Storage Report

NGI is reporting that ahead of the EIA report, Bespoke’s model estimated a pull from inventories of 10 Bcf for the week ended March 12.

A Bloomberg survey found withdrawal estimates ranging from 14 Bcf to 20 Bcf and a median of 18 Bcf. The median forecast in a Reuters poll meanwhile, landed at a pull of 16 Bcf, with draw estimates spanning 1 Bcf to 29 Bcf.

The Wall Street Journal’s weekly survey produced withdrawal estimates that ranged from 14 Bcf to 29 Bcf, with a 22 Bcf average decrease.

NGI estimated a 14 Bcf pull for the latest week.

The five-year average is a withdrawal of 59 Bcf. If the midpoints of polls prove accurate, stockpiles of underground gas would exceed 1.75 Tcf.

Daily Forecast

The EIA report is not expected to stop the price slide. Furthermore, any good news is likely to be offset by continued light demand.