The Weekly Natural Gas Market Newsletter March 6th, 2023
The April NYMEX natural gas futures contract settled 46.1 cents higher for the week at $3.009. In its first full week of trading as the prompt month contract, the contract closed higher 4 out of the 5 trading sessions and traded in almost a 50-cent range posting a low of $2.55 and a high of $3.03. The contract is finding a little bit of strength due to some colder than normal weather that will impact parts of the country over the next two weeks. The contract also closed above some key technical indicators of its 10 day and 50 day moving averages. This marks the first time since mid-December that a prompt month contract has settled above these indicators which could provide some additional technical strength to propel prices higher over the next few trading sessions.
For the week ending 2/24, the EIA reported a withdrawal of 81 BCF. Current storage inventories now stand at 2,114 BCF which is 27.1% higher than last year's level and 19.3% above the previous 5-year average. Early expectations for next week's report indicates a withdrawal of 75 BCF. Storage levels are poised to end the traditional winter withdrawal season in a much better position than last year thanks to a mild winter thus far.
LNG exports from the Freeport facility have been steadily increasing since operations resumed in mid-February. While daily feedgas levels haven't quite reached the facility's normal maximum daily capacity level of over 2 BCF/day, the feedgas level was seen at just under 1.5 BCF on Friday. Total US LNG exports were seen at 13.7 BCF day on Friday which marks the highest ever daily level ever recorded. As the Freeport facility slower continues to work back up to normal pre-fire levels, daily LNG exports should exceed 14 BCF in the coming weeks. Barring any major unplanned facility outages, demand from US LNG export facilities will likely help keep natural gas prices supported from existing price levels.