CC Natural Gas closed @ $2.74 up another 6 cents.
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Background & analysis of recent price & trends from Natural Gas Intel. site.
<Lifted by Exports, May Natural Gas Futures Finish Strong
BY KEVIN DOBBS
April 19, 2021
LNG feed gas volumes hovered close to 2021 highs. Pipeline exports to Mexico also held strong. Forecasters are calling for below-average temperatures. Natural gas futures forged higher on Friday, marking the fourth time during the week the prompt month finished in the green. Robust liquefied natural gas (LNG) volumes, coupled with seasonally strong weather-driven demand, fueled the rally. >
<LNG feed gas volumes hovered close to 2021 highs and above 11 Bcf on Friday, NGI data showed, as export destinations in Asia and Europe continued to buy up U.S. supplies of the super-chilled fuel. Pipeline exports to Mexico also held strong, hanging near 7 Bcf.
A round chilly spring weather propelled cash prices most of the week and provided added support for futures. Forecasters are calling for below-average temperatures in the week ahead, too, adding heating-degree days (HDD) and further propelling optimism in markets.
“Overnight, the European model continued to shift significantly cooler, adding 21.3 HDDs over the past 24 hours and extending cooler-than-normal weather through the end of April,” EBW Analytics Group said Friday.
The American model was essentially flat over the same period, EBW noted. It called for cooler temperatures over the coming week but a return to mild spring weather before the end of the month.
Traders also further absorbed a favorable U.S. Energy Information Administration (EIA) inventory report.
EIA on Thursday reported an injection of 61 Bcf natural gas into storage. The result came in comfortably lower than median estimates found by major polls and the year-earlier injection of 68 Bcf.
The latest build lifted inventories to 1,845 Bcf, below the year-earlier level of 2,087 Bcf and slightly above the five-year average of 1,834 Bcf.
Wood Mackenzie analyst Eric Fell said the EIA figure “was a whopping 14 Bcf less than our call.” Compared with gas-weighted degree days and normal seasonality, he said, the reported figure was tight by 2 Bcf/d versus the five-year average.
While the latest storage report showed an 11 Bcf surplus compared with the five-year average, “deficits are forecast to quickly reemerge” given the cool weather of the past week and forecasts for more, EBW said.
The South Central region remains at a 29 Bcf deficit compared with the five-year average, the firm added, while all other regions sit at modest surpluses. With Gulf Coast LNG and pipeline exports to Mexico high, and with the potential for industrial demand increases, “this pattern may strengthen into midsummer,” EBW said.
Industrial demand is poised to mount alongside a strengthening economy in the second half of the year, analysts said. As vaccination programs, while bumpy, continue to progress and brighten a light at the end of the coronavirus pandemic tunnel, energy needs are expected to climb as economic momentum mounts.>
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