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NYMEX May natural gas settles at $3.187/MMBtu, up 3.7 cents

Houston (Platts)--12 Apr 2017 451 pm EDT/2051 GMT


The NYMEX front-month natural gas contract edged 3.7 cents higher Wednesday to settle at $3.187/MMBtu, chipping into Tuesday's near 9-cent decline ahead of the weekly US Energy Information Administration natural gas storage report.

According to Platts Analytics' Bentek Energy, US demand is expected to surge 2 Bcf day on day Thursday, reaching about 65 Bcf/d, with a large portion of coming from an increase in residential/commercial demand in the Northeast.

Looking ahead, prospects for weaker US demand in the coming weeks and restrictions on NET Mexico, impacting exports into the Mexican market, may prove difficult for the prompt month to continue to trudge higher over the next two weeks.

Forecasts through April 26 maintain that US demand will hover near 64 Bcf/d, below the current April month to date of 65.5 Bcf/d, and a stark 8.2 Bcf/d below year-ago levels.

The National Weather Service projects the eight- to 14-day temperature outlook to mirror more immediate weather outlooks, with "near to below normal temperatures [being] favored over the northern [continental US]," with a high degree of confidence of above average temperatures over the southern half of US.

In addition, CENEGAS announced that from April 10 through 21, NET Mexico flows through the Agua Dulce compressor station will be restricted in a range of 570 MMcf/d to 1.22 Bcf/d.

In the more immediate, preliminary projections formulated by Platts expects an injection between 9 Bcf-13 Bcf into storage stocks, bringing total inventory to nearly 2.064 Tcf, about 416 Bcf below year-ago levels.

Even as 2017 to-date US demand sits 5.1 Bcf/d below the 2016 year to date level of 86.3 Bcf/d, a 2.3 Bcf/d surge in LNG feedgas and Mexican exports from 2016 combined with a 1.9 Bcf/d dip in total US dry production and national storage stocks below year ago levels has engendered a tighter supply balance, helping to buoy the prompt-month contract compared with year-ago levels.

--Ryan Ouwerkerk, ryan.ouwerkerk@spglobal.com

--Edited by Richard Rubin, richard.rubin@spglobal.com




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