Highlights of this week’s Natural Gas Summary and Outlook follow. The full report is available at the link below.
Natural Gas Summary and Outlook
- The market could not continue higher and slipped 17.4 cents (6.3%) to $2.568 on a 22.7 cent range. At the same time, prices recorded a rare inside week, with prices remaining completely within the previous weeks’ price range.
- Although this week’s storage report was smaller than normal, the differential was not as large and thus the pace of storage surplus reduction slowed. After peaking at 893 BCF on March 30, the storage surplus now stands at 720 BCF. Our current forecast is that the storage surplus will be below 700 BCF by early June.
- Temperatures across the country represent the historically lowest demand profile witnessed throughout the year. Excluding holiday influenced weeks, the recent 77 BCF injection may be the largest of the 2012 injection season.
- The electric generation sector remains the primary supply/demand balance driver. Thus, the market reaction to the June index pricing as well as electric grid reliability considerations will garner close attention.
- Tropical Storm Beryl is considered a bearish event with rain and power outages reducing demand and no production curtailments.
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