In an EBW Analytics Group report despatched to Rigzone on Tuesday by the EBW Analytics Group crew, Eli Rubin, an vitality analyst on the firm, stated pure gasoline bulls try to “maintain the road” forward of the April contract rollover.
“The April pure gasoline contract examined assist within the mid-to-high $3.80s Sunday and Monday evenings, however bullish name possibility holders try to keep up assist on the $4.00 strike value forward of contract choices expiration tomorrow,” Rubin famous within the report.
“Strengthening climate runs and Henry Hub spot costs rebounding to $4.03 could reinforce assist,” Rubin added.
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Within the report, Rubin stated sturdy day by day heating demand tomorrow and early subsequent week may present additional value assist.
“Sizable weekly injections are potential in early April, although, with gentle spring climate serving to to quickly erode excellent storage deficits over the subsequent month,” Rubin warned.
“Within the rapid time period, value motion will likely be a operate of dealer positioning by way of April contract choices expiration tomorrow and ultimate settlement on Thursday,” Rubin added.
“Whereas technical assist seems staunch, we retain a modest bearish bias over the subsequent 7-10 days as Could turns into the NYMEX front-month and bearish spring fundamentals roll ahead,” Rubin continued.
In a separate EBW Analytics Group report despatched to Rigzone on Monday by the EBW Analytics Group crew, Rubin stated the April pure gasoline contract examined each assist and resistance on Friday earlier than closing inside a penny of Thursday’s sub-$4.00 per million British thermal unit (MMBtu) shut.
“Regardless of sinking final evening [Sunday] because of a hotter weekend climate shift, although, preliminary assist is holding agency this morning,” Rubin famous in that report.
“DTN’s gentle weekend climate shift is way bigger than forecast by different meteorologists. Nonetheless, the outlook amplifies near-term draw back value dangers as a light spring envelops the nation into early April,” Rubin added.
“Enormous seasonal injections are potential with gasoline manufacturing at spring file highs, no heating or cooling demand, and energy burns comfortable because of excessive renewables and costs incentivizing gas-to-coal switching,” Rubin continued.
“Close to-term pure gasoline pricing could also be a operate of dealer positioning round April choices expiry and ultimate settlement. Whereas dangers misinform the draw back, merchants making an attempt to maintain $4.00 into choices expiration can’t be dominated out,” Rubin went on to state.
In a BMI report despatched to Rigzone by the Fitch Group on Friday, analysts at BMI highlighted that, “within the U.S., Henry Hub costs have held above $4 per MMBtu for the previous three weeks alongside file LNG exports”.
“That is in keeping with our bullish view of U.S. gasoline costs general for the 12 months (which we forecast to common to $3.4 per MMBtu in 2025 from $2.4 per MMBtu in 2024),” the analysts added.
That BMI report confirmed that BMI expects the entrance month pure gasoline Henry Hub value to common $3.40 per MMBtu in 2025 and $3.80 per MMBtu in 2026.
A BofA International Analysis report despatched to Rigzone on March 19 by the BofA International Analysis crew famous that Henry Hub gasoline costs “spent most of 2024 digging out of the opening created by a heat winter and extra provide development, averaging ~$2.40 per MMBtu”.
“The market lastly turned the nook in December because the Plaquemines LNG terminal began and colder climate crept into the forecast, shortly pushing gasoline above $4 by year-end,” the report added.
“As winter progressed, a number of chilly blasts chipped away on the surplus and lowered finish of season storage estimates. By early March, storage sat 230 billion cubic ft under the five-year common, down ~900 billion cubic ft 12 months on 12 months, and now appears set to exit March <1.7 trillion cubic ft,” they continued.
“Costs responded to the speedy tightening, hitting a excessive of $4.90 final week, whereas the curve flipped to backwardation,” BofA International Analysis went on to state.
In that report, BofA International Analysis revealed that its Henry Hub value forecast was $4.64 per MMBtu in 2025 and $4.50 per MMBtu in 2026.
To contact the creator, e-mail andreas.exarheas@rigzone.com
