Editor's Note:
After ending the prior session with a 2.6-cent gain at $2.940/MMBtu, NYMEX June natural gas futures slipped in technical selling overnight before returning higher ahead of the Friday, May 25, open, amid lingering fundamental support. At 6:30 a.m. ET, the contract was 1.4 cent higher at $2.954/MMBtu while trading a range from $2.925/MMBtu to $2.955/MMBtu.
Efforts to rebuild inventories slowed down in the most recent storage report, which outlined a net 91-Bcf injection for the week ended May 18 that bested consensus estimates coming into the day and historical averages, but trailed the robust 106-Bcf build reported in the prior week.
The consensus of pre-data outlooks called for a 90-Bcf addition, while historical comparisons included a 74-Bcf prior-year injection and the 89-Bcf five-year average build.
Total working gas stocks currently sit at 1,629 Bcf, still 804 Bcf below the year-ago level and 499 Bcf below the five-year average of 2,128 Bcf.
Warmer weather that ramped up cooling demand during the storage report week is seen to have limited the amount of natural gas available to be moved into underground stocks.
Additional warming that should keep cooling demand elevated is in store in the midrange, as revised National Weather Service outlooks show above-average temperatures spanning the bulk of the U.S. in the six- to 10-day period and the entire country in the eight- to 14-day period. Average temperatures initially encompass portions of the West Coast but eventually disappear from the forecast, while below-average temperatures do not appear in the projections at all.
Ahead of the official June 1 start of the hurricane season, the National Hurricane Center is tracking a broad surface low near the east coast of the Yucatan Peninsula, the agency said at 1:05 a.m. ET May 25.
The hurricane center sees environmental conditions becoming more conducive for development, with a subtropical or tropical depression or storm anticipated to form during the weekend over the eastern or central Gulf of Mexico. The system is given a 70% chance of formation through a 48-hour period and a 90% chance over the next five days.
As storage deficits to historical averages remain substantial, any threat to U.S. natural gas production poses a concern for the market. Allaying worries, however, land rigs that remain away from any threat to offshore production have been on a steady uptrend to ultimately signal an impending boost to production levels.
Cash gas prices were lower across the bulk of the country Thursday.
Looking at the key delivery locations, an almost 14-cent decline steered Transco Zone 6 NY day-ahead gas price activity to an index at $2.737/MMBtu, as a near 4-cent reduction took Chicago spot gas pricing to an average at $2.696/MMBtu and a roughly 2-cent slump nudged benchmark Henry Hub cash gas price action to an index at $2.875/MMBtu. Bucking the wider downtrend, an approximately 2-cent gain brought PG&E Gate hub pricing to an average at $3.053/MMBtu.

In regional terms, Northeast next-day gas price action logged a near 4-cent decrease in deals averaging at $2.434/MMBtu, as Midwest and Gulf Coast day-ahead gas prices faltered by around 1 cent on average to indexes at $2.589/MMBtu and $2.826/MMBtu, respectively. West Coast spot gas pricing climbed by about 6 cents against the broad retreat to an index at $1.941/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.
