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Is Mild Weather Setting the Tone for Softer Demand?
Warmer-than-normal conditions are dominating across major demand regions, including the East, South, and Midwest. This is dampening both heating and cooling demand, a common feature of shoulder season trading. Forecasts suggest continued above-average temperatures through late April, leaving little room for a weather-driven price rebound. Without a shift in weather conditions, consumption is expected to remain soft, increasing pressure on storage builds heading into May.
Inventory Miss Offers No Lifeline
Last week’s EIA report showed a 16 Bcf injection for the week ending April 11 — well below consensus expectations of 24 Bcf and the five-year average of 50 Bcf. Still, the miss failed to lift sentiment. Total inventories remain 20.9% below last year and 3.9% below the five-year average, but the market is clearly more focused on upcoming supply-demand conditions than backward-looking inventory surprises. Traders appear unwilling to chase upside without stronger fundamental signals.
Supply Holds Firm While LNG Remains Tepid
Production remains robust, with dry gas output in the Lower 48 above 105 Bcf/day — over 5% higher year-over-year. On the export side, LNG volumes have slipped to 15.5 Bcf/day. While domestic demand has improved slightly — up 2.2% year-over-year — the imbalance remains skewed to the downside. Gains in power sector consumption, currently up 6.4% versus last year, have not been sufficient to offset the broader oversupply.
Are Traders Positioning for a Retest of the 200-Day Moving Average?
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