NYMEX April gas settles 16.5 cents lower at $2.697/MMBtu
Houston (Platts)--26Feb2015/317 pm EST/2017 GMT
NYMEX April natural gas futures settled 16.5 cents lower at
$2.697/MMBtu Thursday on a bearish gas storage report from the US Energy
Information Administration.
The EIA Thursday reported a withdrawal of 219 Bcf, less than the market
consensus of 239-243 Bcf in a Platts survey of analysts.
"It was a bullish number, it's just that expectations were for something
significantly higher," Tradition Energy analyst Gene McGillian said. "It
means the market is going to have to contend with production numbers
running 6 Bcf/day above last year."
EIA, in the corresponding week last year, reported a 117-Bcf withdrawal.
The five-year average for the corresponding week was a 131-Bcf pull.
"The announcement failed to meet expectations of 241 Bcf, and our
modeling indicated that it was the most oversupplied weekly storage
report since September," Aaron Calder, an analyst with Gelber &
Associates, said.
"This number implies that production will overwhelm any bullish
fundamental factors for the foreseeable future," Calder said in an
email, adding warmer forecasts contributed to the April contract's
weakness.
WSI's 11-15 day forecast Thursday called for below-normal temperatures
over a smaller area than Wednesday's 11-15 day forecast. Below-normal
temperatures are likely in the Great Lakes area, the central Mississippi
and Ohio river valleys, and the East Coast from North Carolina to Maine,
WSI said.
"Domestic weather models...forecast the jet of cold Alaskan air will
stay trapped above Alberta due to warm air blocking and unable to reach
population centers in the United States," Calder said. "This blocking
would effectively limit the impact of a late-winter cold snap to the
next two withdrawals and allow the market to look ahead to the injection
season instead of being concerned with an extended winter."
The April gas contract traded Thursday in a range of
$2.689-$2.888/MMBtu.
The NYMEX settlement is considered preliminary and subject to change
until a final settlement price is posted at 7 pm (0000 GMT Friday).
--Mark Watson,
markham.watson@platts.com
--Edited by Kevin Saville,
kevin.saville@platts.com
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