Provident Energy Consulting

NYMEX April Gas Futures Nudge Higher


The NYMEX April natural gas futures contract gained about 1 cent Tuesday as strong winter demand shifts to shoulder season weakness.

The April contract settled at $2.784/MMBtu, up 1.2 cents from
Monday’s close. This slight rise is dwarfed, however, by Monday’s 9.3-
cent day-on-day drop. April traded in a range between $2.752/MMBtu
and $2.798/MMBtu on Tuesday.
Early morning trading suggested the contract might have settled at
$2.760/MMBtu, making it potentially the first time since February 14 that
the front-month closed below where it ended a session this time last year.
However, settling at $2.784/MMBtu the current front-month
contract continues to price above levels this time last year.
Summer prices also inched higher Tuesday, with May and June
each gaining over 1 cent to settle at $2.797/MMBtu and $2.848/MMBtu,
respectively.
US dry gas production has sat at 86.5 Bcf/d for three consecutive
days, but is expected to dip 1.1 Bcf day on day to 85.4 Bcf Tuesday,
according to S&P Global Platts Analytics. Texas onshore production
alone is expected to drop over 600 MMcf day on day to 30 Bcf, the
lowest level since March 5, according to Platts Analytics.
Platts Analytics expects domestic US demand will total 88.8 Bcf on
Tuesday and decrease over 4 Bcf/d to an average of 84.2 Bcf/d in the
next seven days.
Demand through the first 12 days of March has averaged 14.7 Bcf/d
greater than in the same period last year, according to Platts Analytics.
This reflects colder temperatures seen lingering this year that have
driven residential and commercial demand of late.
Looking forward, the most recent eight– to 14–day temperature
forecast from the US National Weather Service depicts mild
temperatures, with most of the US on par with historical ranges. The
seasonal outlook for April-June remains warmer than average.

Source: Platts 2019

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