Natural gas futures moved higher on Friday, cementing a strong weekly gain. The market hits its highest level since March 12 on the back of increased weather-driven demand and strong liquefied natural gas (LNG) volumes. Perhaps putting a lid on the rally was a 2.0 cent drop in Natural Gas Intelligence’s (NGI) Spot Gas National Average.
On Friday, June natural gas settled at $2.754, up $0.024 or +0.88%.
LNG Feed Gas Volumes Remain Supportive
NGI reported that LNG feed gas volumes hovered close to 2021 highs and above 11 Bcf on Friday, as export destinations in Asia and Europe continued to buy up U.S. supplies of the super-chilled fuel. Pipeline exports to Mexico also held strong, hanging near 7 Bcf.
Short-Term Weather Outlook
“Overnight, the European model continued to shift significantly cooler, adding 21.3 HDDs over the past 24 hours and extending cooler-than-normal weather through the end of April,” EBW Analytics Group said Friday.
The American model was essentially flat over the same period, EBW noted. It called for cooler temperatures over the coming week but a return to mild spring weather before the end of the month.
US Energy Information Administration Weekly Storage Report
The EIA reported on Thursday that domestic supplies of natural gas rose by 61 billion cubic feet (Bcf) for the week ended April 9. That compares with an average increase of 65 Bcf forecast by analysts polled by S&P Global Platts.
Total stocks now stand at 1.845 trillion cubic feet (Tcf), down 242 Bcf from a year ago but 11 Bcf above the five-year average, the government said.
Technically, the main trend changed to up. If the upside momentum continues then look for the move to possibly extend into a key 50% to 61.8% retracement zone.
The February 17 top is $3.082. The March 18 bottom is $2.521. Its retracement zone at $2.802 to $2.868 is the next likely upside target. Sellers could come in on a test of this area.