Natural gas prices bounced from the recent low of $2.453 registered on Apr. 6th and now stand at $2.736 on the backdrop of strong export demand and dipping temperatures in the US which has increased heating demand.
A late-season snowstorm over the weekend struck the US Northeast increasing heating requirements. The US is likely to see below-normal temperatures through at least Apr. 23, which should boost heating demand for natural gas. US natural gas prices are receiving support from increasing export demand. As per Bloomberg, gas flows to US LNG export terminals on Monday rose +48% y/y to 11.8 bcf.
An increase in U.S. electricity output is also positive for NG prices. US electricity output in the week ended Apr. 10 rose +4.9% y/y to 673,213 GWh (gigawatt hours).
Also, gas production on Monday fell -2.6% y/y to 89.79 bcf/d, which is supporting NG prices.
Last week's EIA inventory report was supportive for prices. US natural gas inventories rose +61 bcf to 1,845 bcf, against expectations of a +67 bcf increase. Inventory is down -12.0% y/y and is +0.6% above their 5-year average.
Baker Hughes reported last Friday that the number of active U.S. nat-gas drilling rigs in the week ended Apr. 16 rose by +1 rig to a 1-year high of 94 rigs.
Natural gas may trade firm while above the key support level of 50 days EMA at $2.649 and 200 days EMA of $2.563. Prices may face resistance near $2.829 and $2.914.