Editor's Note:
Following a 1.2-cent slump to settle at $2.847/MMBtu ahead of the weekend, NYMEX June natural gas futures extended lower overnight leading up to the Monday, May 21, open as revisions to weather forecasts look to keep a lid on early cooling demand. At 6:30 a.m. ET, the contract was 2.5 cents lower at $2.822/MMBtu.
Updated National Weather Service outlooks show above-average temperatures engulfing the country, except for the Southeast, in the six- to 10-day period and receding from the bulk of the eastern U.S. to encompass a little more than the western half of the country in the eight- to 14-day period. Average to below-average temperatures that are initially confined to the Southeast will eventually overtake a majority of the eastern U.S. into parts of Texas.
Early cooling load has led gains in natural gas demand in the U.S. of late. According to the U.S. Energy Information Administration's latest "Natural Gas Weekly Update" for the week ended May 16, an 8% week-over-week increase in power burn as temperatures rose past 75 degrees F in portions of Texas and the Southeast led a 4% uptick in total U.S. gas consumption over the week.
A cooldown over the eastern U.S. heading into the onset of the meteorological summer suggests downside momentum for cooling demand, which should leave more natural gas available to flow into underground storage facilities.
Dry production was down 1% during the week ended May 16, but the latest U.S. rig count that was up one to a total of 1,046 for the report week to May 18 suggests an impending growth in output.
The anticipation of subdued demand and rising production should keep natural gas inventories on track toward to a healthy end-of-season level. Natural gas inventories need to climb by about 12 Bcf/d on average to reach above 3.5 Tcf by early November, according to the American Gas Association.
Total working gas stocks were at 1,538 Bcf, or 821 Bcf below the year-ago level and 501 Bcf below the five-year average of 2,039 Bcf, after the EIA reported a 106-Bcf build during the week ended May 11 that marked the season's first triple-digit injection.
Cash gas pricing was mixed May 18 on the back of fluctuating demand expectations through and coming off the weekend as participants booked a revised offering for Saturday-through-Monday flow.
Looking at the key hubs, an almost 14-cent decline steered Transco Zone 6 NY day-ahead gas price action to an index at $2.455/MMBtu as a near 7-cent increase drove Chicago spot gas pricing to an average at $2.449/MMBtu. PG&E Gate hub prices were up around 3 cents on average at an index at $2.899/MMBtu, while benchmark Henry Hub next-day gas price activity was unchanged day on day at an index at $2.750/MMBtu.

In regional terms, Northeast cash gas pricing logged a near 12-cent gain in deals averaging at $2.359/MMBtu as Midwest next-day gas price activity shed about 1 cent on the session to average at $2.334/MMBtu. West Coast day-ahead gas price action fell by approximately 9 cents to an index at $1.745/MMBtu as Gulf Coast spot gas prices advanced by almost 4 cents on average to an index at $2.706/MMBtu.

Market prices and included industry data are current as of the time of publication and are subject to change. For more detailed market data, including power and natural gas index prices, as well as forwards and futures, visit our Commodities pages.
