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Jonathan Lee Senior Energy Market Intelligence Manager at ENGIE Impact
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Market Commentary | Week Ending 3/10/2023

Natural gas retreats on growing storage surplus.

Monday 3/6

The Apr-2023 NYMEX natural gas contract tumbled 43.7 cents lower to $2.572 per MMBtu after weather models downgraded the predicted cold for mid-March, which would likely maintain the healthy storage surplus heading into refill season. The Apr-2023 WTI crude oil contract climbed 78 cents higher to $80.46 per barrel even after China lowered its forecast for economic growth this year to due to their lockdown policies. Equity markets were moderately higher as investors positioned ahead of Jerome Powell’s testimony in front of Congress Tuesday.

Tuesday 3/7

Natural gas rebounded 11.5 cents to $2.687 after finding support at the 20-day moving average with heating demand expectations largely unchanged overnight. Equities suffered major losses after Powell said the central bank would likely lift rates more than they expected to combat high inflation. Crude fell $2.88 to $77.58 on concerns rising interest rates would slow economic activity and reduce demand for the commodity.

Wednesday 3/8

Gas prices slid 13.6 cents lower $2.551 ahead of the next day’s storage report, which was expected to show a draw around 90 Bcf that would widen the surplus compared to last year and the 5-year average. Oil closed 92 cents lower at $76.66 even after the EIA reported a 1.7-million-barrel decline in oil inventories. Equities were mixed on the day after Fed Chair Powell said the central bank was keeping its options open about future rate increases.

Thursday 3/9

Natural gas dipped 0.8 lower to $2.543 after the EIA reported a below-normal 84 Bcf withdrawal from storage, which widened the surplus to the 5-year average to 359 Bcf. Crude oil extended recent losses as labor market and economic concerns overshadowed a weaker U.S. dollar. By day’s end, the front-month contract settled 94 cents lower at $75.72. Stocks traded in negative territory after the Labor Department reported a higher-than-expected 211,000 new claims for unemployment benefits.

Friday 3/10

Natural gas lost 11.3 cents to close at $2.430 even after the Freeport LNG export facility received approval to start up its final train and resume full operations. Crude gained 96 cents to $76.68 on reports OPEC and its producing allies pumped 80,000 barrels per day less in February than the month prior. Equities turned lower late in the session even after the Labor Department revealed a higher-than-expected 311,000 jobs were created during February.

Looking Ahead

Energy prices will likely struggle to gain upside momentum unless weather forecasts advertise a colder pattern that will lead to stronger late-season heating demand.

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