Big Warmer Weekend Trends for Mid-April Drop Nat Gas Prices Further

April 3, 2023: While the weather data trended colder Friday, it reversed strongly warmer over the weekend w/both the GFS and EC trending 30 HDDs warmer. Although, this late in the season, HDDs don’t have as big of an impact on demand so the damage of losing 30 HDDs isn’t as significant as core winter but still a hefty amount. What could soften the blow of big warmer trends is LNG exports remain very strong at over 14 Bcf and at all-time highs. And with Freeport LNG holding at 2 Bcf/day over the weekend, it suggests the facility could finally be at full operations. But what’s been the biggest factors that weighed on prices the past few months was surpluses ballooning to +378 Bcf on warmer than normal winter temperatures, as well as US production remaining strong at 100-102 Bcf most days.

As we mentioned all last week, longer-range weather maps remained rather cool across the western and northern US for mid and late April, but with the risk was they would trend warmer in time, which they did. The net result of recent and coming weather patterns is for this week’s EIA report to print a larger than normal draw to drop surpluses to near +300 Bcf and end winter draw season supplies at 1,825 Bcf. Although, after warmer trends, next week’s build will be near normal, while the following two builds are likely to be larger than normal. Essentially, surpluses are going to stall near +300 Bcf, with the potential to increase back towards +350 Bcf during mid-April.