The NYMEX April natural gas futures contract continued to increase Monday, fueled by strong demand as weather forecasts indicate winter is not over just yet.
This on the heels of three straight sessions of gains that have seen the prompt month increase 21.9 cents since the March 7 close of $2.824/MMBtu.
However, prices may face headwinds later in the week as warmer weather is expected to return in a few weeks for a majority of the continental US.
The NYMEX April contract settled trading at $3.043/MMBtu Monday, up 3.5 cents, and traded in a range between $3.028/MMBtu and $3.089/MMBtu in the session.
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The National Weather Service's six- to 10-day forecast called for most of the continental US to see temperatures rise above normal, except for a small portion of the Pacific Northwest and the Northeast. This pattern is expected to hold through the rest of the month.
Temperatures plummeted to the upper 40s to lower 50s along the US Gulf Coast over the weekend. In the Northeast, heavy snow is forecast through Tuesday morning, and the weather service expects blizzard conditions for the New York City and New Jersey metro areas.
"The natural gas market is extending its price recovery from the February lows on the back of a temperature forecast that continues to trend colder, with a late winter spike in heating demand this week helping to support the rally," Citi energy futures specialist Tim Evans said.
Over the past six days, total demand strengthened as cooler weather infiltrated many parts of the US. On March 8, demand totaled 76.2 Bcf and steadily increased to 99.3 Bcf by March 12, according to Platts Analytics' Bentek Energy
. Over the next seven days, total demand will hold at 92.2 Bcf and will outstrip total supply by around 15 Bcf.
--Art Fresquez, firstname.lastname@example.org
--Edited by Richard Rubin, email@example.com