Shoulder season doldrums appeared to be setting in for natural gas futures traders Tuesday, though the April contract was flashing last-minute fireworks on its final day. Meanwhile, cash trading continued to reflect swollen storage levels and underwhelming springtime temperatures.
Here’s the latest:
- April Nymex contract at $1.563/MMBtu as of 2:20 p.m. ET, off 5.2 cents; May down 1.3 cents to $1.776
Earlier in the day, the April Nymex contract had appeared to be headed for an uneventful send-off as the prompt month before prices started to dip late in the session. “Last-day trading is often volatile as the number of physical players dwindles and volume decreases, with risks in both directions,” EBW Analytics Group analyst Eli Rubin said.
- Another month of historically weak baseload prices potentially in store
With April Henry Hub futures on track to expire near or below the March final settlement, that would keep prices at the benchmark near all-time lows going back to at least 2000. According to historical data from NGI’s Bidweek Survey, the previous record low monthly price at Henry Hub was $1.495 in July 2020. April 2024 prices could finish below the early pandemic-era April 2020 bidweek price of $1.630.
- Cash prices mixed; spot gas National Avg. up 6.0 cents to $1.330, according to NGI’s MidDay Price Alert
- Henry Hub spot price up 1.5 cents to $1.475, a roughly 30-cent discount versus recent May Nymex price
Conditions through the rest of the work week should deliver “moderate” levels of weather-driven demand for natural gas, according to NatGasWeather. “A strong weather system continues to impact the Midwest/central U.S. with rain, snow and highs of 20s to 50s,” the firm said. “Additional weather systems will track into the western and central U.S. late in the week. The southern and eastern U.S. will be mild to nice with highs of upper 50s to 80s the next few days” before “briefly cooling” on Friday.
- Most West Texas hubs clawing their way back above zero, MidDay Price Alert data show
- W. TX/SE NM Regional Avg. at 11.5 cents, up 63.5 cents day/day
Spot prices near the prolific Permian Basin have been getting crushed this month. As NGI’s Kevin Dobbs notes in a new report, the region has seen a sustained stretch of negative pricing amid pipeline maintenance, weak demand and booming associated gas output.
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