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Investing.com - U.S. natural gas prices edged higher Monday, rebounding after recent losses, but remained on course for a losing month as warmer conditions weigh.
At 07:35 ET (12:35 GMT), natural gas prices rose 3.9% to $4.223 per million British thermal units, or MMBtu, but remained on course to post losses of just under 4% this month.
This modest rebound came after bargain buying helped prices recover from recent losses, but short-term fundamentals continue to weigh heavily on sentiment.
Weather forecasts through early April remain unfavorable for natural gas consumption, as most of the U.S. experiences warmer-than-normal temperatures, and thus residential and commercial heating demand continues to lag.
The news was less positive in Europe, as natural gas prices extended declines for a second straight session, after falling around 4.7% week-on-week as of last Friday.
“Prices came under pressure as the heating season came to an end, and the market focus shifted towards the inventory refill for next winter,” said analysts at ING, in a note. “Along with that, warmer weather forecasts and strong flows of liquefied natural gas are further weighing on prices.”
The inflow of LNG to the European Union in the last seven days was around 4.4TWh/day according to ALSI, translating to around 1600TWh per annum, which, if sustained, represents an adequate level with respect to refilling inventories to 80-90%.
“It seems the strong inflow level is driven by a sluggish Chinese demand combined with an ongoing US supply expansion. However, the market has not even started (formally) on the inventory injection season (starting April 1st), therefore, it is a long way to go and several roadblocks to overcome before crossing the finish line on ahead of next heating season,” said analysts at Arctic Securities.