In an EBW Analytics Group report sent to Rigzone on Wednesday, EBW Energy Analyst Eli Rubin highlighted that the April U.S. natural gas contract “tested as low as $2.923 [per million British thermal units] early this morning”, which he pointed out was “a two-week low”.
Rubin outlined in the report that the decline came as natural gas “continues to decouple from the crude oil correlations that provided upside from the Iran war”.
“Still, a rare April contract premium to May may imply lingering war-driven impacts that could fade before next Friday’s final settlement,” Rubin added in the report.
The EBW Energy Analyst noted that daily heating demand is “poised to subside as a brief cold push passes through the East, faltering 18 Bcfpd [billion cubic feet per day] into the weekend”.
“Already, spot gas prices are in retreat across the Midwest and Mid-Atlantic, with Northeast prices down 61 cents day over day,” he said.
Rubin also outlined in the report that Thursday’s weekly natural gas storage report from the U.S. Energy Information Administration (EIA) “may verify the first storage surplus vs. five-year norms since Winter Storm Fern”.
“With the year over year surplus to near 174 Bcf, strong production and mild weather, medium-term price risks remain to the downside into the spring,” Rubin warned.
In Wednesday’s report, EBW predicted a “test sub-$3 per MMBtu” trend for the NYMEX front-month natural gas contract price over the next 7-10 days and a “likely lower” trend over the next 30-45 days.
The U.S. Energy Information Administration’s (EIA) latest weekly natural gas storage report, which was released on March 12 and included data for the week ending March 6, noted that, according to EIA estimates, working gas in storage was 1,848 billion cubic feet as of March 6.
“This represents a net decrease of 38 Bcf from the previous week,” the EIA stated in that report.
“Stocks were 141 Bcf higher than last year at this time and 17 Bcf below the five-year average of 1,865 Bcf. At 1,848 Bcf, total working gas is within the five-year historical range,” it added.
In an EBW report sent to Rigzone on Tuesday, Rubin highlighted that, “after testing sub-$3.00 per MMBtu” on Monday afternoon, the April contract was “recovering alongside oil prices” on Tuesday morning.
“The fact that natural gas slid yesterday (despite rising heating demand) and is bouncing this morning (despite weakening weather) obliquely suggests continuing non-fundamental influences from the Iran war,” Rubin added in Tuesday’s report.
“Daily heating demand is poised to peak today before softening 23 Bcfpd into the weekend. As Week 2 heating demand plunges 44 gHDDs week-over-week, this cold burst may mark the end of daily withdrawals nationally entering the traditional April October injection season,” he continued, noting that March heating demand “is on pace for the lowest since 2016”.
Rubin went on to state in this report that the transition out of the heating season is likely to drive NYMEX gas futures lower in the weeks ahead.
EBW also predicted a “test sub-$3 per MMBtu” trend for the NYMEX front-month natural gas contract price over the next 7-10 days and a “likely lower” trend over the next 30-45 days in Tuesday’s report.
In its latest short term energy outlook (STEO), which was released earlier this month, the EIA noted that “reductions in the flow of liquified natural gas (LNG) through the Strait of Hormuz have caused natural gas prices in Europe and Asia to increase” but added that it expects U.S. natural gas prices “to be relatively unaffected by this development”.
In its latest STEO, the EIA projected that the U.S. natural gas Henry Hub spot price will average $3.76 per MMBtu in 2026 and $3.85 per MMBtu in 2027.
A BMI report sent to Rigzone by the Fitch Group on Thursday projected that the front month natural gas Henry Hub price will average $3.90 per MMBtu this year and $4.00 per MMBtu next year.
“Henry Hub prices traded at $3.0-3.2 per MMBtu in the week of March 9, up from an average of $2.9 per MMBtu in the last week of February, lifted by the growth in global gas price benchmarks,” BMI analysts stated in that report.
“We continue to expect Henry Hub front-month prices to average $3.9 per MMBtu in 2026,” they added.
“While we highlight growing upside risks to this forecast, the muted response of front month Henry Hub prices to the global gas supply crunch reaffirms our view that strong domestic gas supply in the U.S. will limit upside potential,” they continued.
To contact the author, email andreas.exarheas@rigzone.com
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