US natural gas futures ended unchanged on Monday despite forecasts for above-normal temperatures over the next two weeks. On its first day as the front-month, May futures on the New York Mercantile Exchange closed up 0.5 cents at $2.644 per million British thermal units.
Implied volatility for the front-month, a component used to price options, fell to its lowest since October. Some of the most active options were the $2 June and October 2015 puts.
Thomson Reuters Analytics said the latest Global Forecast System weather model for the lower 48 US states switched to warmer-than-normal temperatures over the next two weeks from forecasts for colder-than-normal last week.
Heating degree day measure of population-weighted average temperatures, for the lower 48 states were expected to reach 194 over the next two weeks.
That compared with a forecast 189 HDD earlier Monday, 237 HDD on Friday and a 30-year norm of 209 for this time of year, according to Thomson Reuters Analytics.
Consumption was expected to hold at 66.6 billion cubic feet per day on Tuesday, the same as Monday. The norm for this time of year is 65.5 bcfd.
Thomson Reuters Analytics forecast production would ease to 73.8 bcfd from 73.9 bcfd on Friday. That compared with 68.6 bcfd a year ago and a record high of 74.4 bcfd in mid-February.
Net imports from Canada were expected to fall from 5.9 bcfd on Friday to 5.3 bcfd, the least since November, while exports to Mexico were expected to hold at 1.9 bcfd, the same as Friday.
With US production growing, analysts expect imports from Canada to decline as exports to Mexico, Asia and Europe increase, making the United States a net exporter of gas in a few years. Imports from US liquefied natural gas terminals were expected to hold at 0.3 bcfd, the same as Friday, with most gas coming from Elba in Georgia.
There were no LNG tankers at any of the 11 US or one Canadian LNG import facilities.
In early estimates, analysts forecast utilities pulled 12 billion cubic feet of gas from storage during the week ended March 27.
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