The CME/NYMEX Henry Hub June gas futures contract closed Friday at $2.585/MMBtu, up 32 cents, or 14%, from a week earlier. The bulk of the weekly gains came Thursday when the contract jumped +22.7 cents following a smaller-than-expected EIA storage injection number for last week. The EIA reported a +99-Bcf build for the week ended May 12, lower than the industry average of 108 Bcf — which was also in line with our final estimate — and near the bottom of the Bloomberg survey range, from 98 Bcf to 116 Bcf.
The build was still modestly larger than in recent years and expanded the storage surplus vs. last year and the 5-year average. However, it reflected a bullish shift in the balance on a per-degree basis compared with recent weeks. The reported injection posted just ~3 Bcf above the temperature-modeled estimate of 96 Bcf, compared with an average of 14 Bcf above the historical temperature model in the previous three weeks. Lower wind generation combined with an uptick in electricity demand, along with a drop in gas imports from Canada due to the wildfires, contributed to the tighter balances.
