Natural gas prices which are currently trading near $2.599 with moderate losses from the previous session are likely to trade in a range on the backdrop of mixed fundamentals. Export demand is likely to support the prices however mixed weather forecast is likely to limit the gains. The Commodity Weather Group is expecting below-normal temperatures, Texas to North Dakota and east to New York until Apr. 23. However, the west coast would see above normal temperature which is likely to limit the gains.
Gas flows to US LNG export terminals on Wednesday rose +34% y/y to 11.4 bcf on Mar. 20.
Gas prices also found support from increasing electricity output in the US and low gas production. As per Bloomberg data, US electricity output in the week ended Apr. 10 rose +4.9% y/y to 67,3213 GWh (gigawatt hours) and gas production on Wednesday fell -1.4% y/y to 90.527 bcf/d.
However, weaker domestic demand is likely to limit the gains. Natural gas domestic demand in the US on Wednesday fell -12% y/y to 66.1 bcf.
Meanwhile, US natural gas inventories are down -11.9% y/y and are -1.3% below their 5-year average as per the last EIA report. The EIA is scheduled to release its weekly report later today. The consensus is for Thursday's weekly EIA natural gas inventories to climb +67 bcf.
Baker Hughes reported last Friday that the number of active US natural gas drilling rigs in the week ended Apr. 9 rose by +2 rigs to a 1-year high of 93 rigs.
Natural gas prices are likely to trade in the range between support and resistance level on the backdrop of mixed fundamental signals. The immediate support level is seen near $2.448 while critical resistance is seen around $2.774