The NYMEX May natural gas futures contract jumped 10.7 cents to $2.018/MMBtu Thursday, marking the first time a prompt-month contract has settled above the $2 mark since February 10.
Amid some cooler-than-normal forecasts for April, the market shrugged off a bearish storage report.
US natural gas storage volumes rose 12 Bcf to 2.48 Tcf for the week ended April 1, according to the US Energy Information Administration.
That set a record high for this time of year, breaking the previous high of 2.474 Tcf set in 2012. The storage data was also bearish compared with the five-year average of a 19-Bcf withdrawal, according to EIA data.
"However, this may not be enough of a shock to offset the late-season heating demand due to the current forecast for colder-than-normal temperatures," said Timothy Evans, energy futures specialist with Citi Futures. "Prices may be able to absorb the bearish storage surprises and still test higher."
Evans said cool forecasts point to a supportive net withdrawal from storage for both the weeks ending April 8 and April 15, but that may also be followed by warmer-than-normal conditions in the 11- to 15-day period.
The National Weather Service's latest eight- to 14-day forecast showed a higher likelihood of above-normal temperatures in most of the eastern and central US, with below-normal temperatures in most of the US Southwest.
Platts unit Bentek Energy forecast US demand to average 74.4 Bcf/d over the next week and then 65 Bcf/d in the eight- to 14-day period, compared with the month-to-date average of 72.7 Bcf/d.
Last week's injection implies that the weather-adjusted supply/demand balance tightened week on week, William Featherston, managing director at UBS investment research, said in a market note.
Featherston said over the last month, UBS estimates the weather-adjusted supply/demand has been 5.7 Bcf/d undersupplied compared with last year and 2.5 Bcf/d undersupplied against the five-year average.
The May contract traded between $1.892 and $2.024/MMBtu.
The NYMEX settlement is considered preliminary and subject to change until a final settlement price is posted at 7 pm EDT (2300 GMT).
