Natural Gas Price Fundamental Daily Forecast – Rebounds as Strong LNG Demand Offsets Demand Worries

Natural gas futures closed higher on Friday for only the third time in 13 sessions as strong liquefied natural gas (LNG) demand offset worries over demand just ahead of the start of the spring shoulder season.

On Friday, May natural gas futures settled at $2.566, up $0.055 or +2.19%.

LNG Feed Gas Volumes Jump

Natural Gas Intelligence (NGI) reported that EBW Analytics Group CEO Andy Weissman noted LNG feed gas volumes reached 11.8 Bcf on Friday – near a record high. He cited “rebounding demand” at the Sabine Pass and Corpus Christi terminals as U.S. exporters fully recovered from interruptions caused by the Arctic freeze in Texas last month.

Asian demand for U.S. exports was strong throughout the winter and now, heading into spring, European demand is mounting as storage levels on the continent dwindled substantially in recent months.

“Since Winter Storm Uri resulted in reduced outages and gas conversation for residential use in Texas, LNG demand has risen 10.0 Bcf/d in the past month,” Weissman said. “Further demand gains are possible – perhaps even eclipsing 12.0 Bcf/d if all terminals achieve maximum demonstrated demand levels at the same time. Gains in LNG feed gas and Gulf Coast industrial demand for natural gas this week may help offset declines in weather-driven demand, allowing small withdrawals to continue near-term.”

Energy Information Administration Weekly Storage Report

The EIA reported on Thursday that domestic supplies of natural gas declined by 11 billion cubic feet for the week-ended March 12. On average, the report was expected to show a decline of 17 billion cubic feet for the period, according to analysts polled by S&P Global Platts.

Natural Gas Intelligence (NGI) reported ahead of the EIA report, Bespokes 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 Journals 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.

Total stocks now stand at 1.782 trillion cubic feet, down 253 billion cubic feet from a year ago and 93 billion cubic feet below the five-year average, the government said.