Editor's Note:
Following a 9.8-cent increase in the prior session to finish at $2.908/MMBtu, NYMEX June natural gas futures pulled back overnight ahead of the Wednesday, May 23, open in a round of selling amid overbought conditions, as fundamentals remain bullish. At 6:50 a.m. ET, the contract was 0.3 cent higher at $2.911/MMBtu having edged back to the plus side of the ledger while trading from $2.898/MMBtu to $2.914/MMBtu.
Weather-related demand support is expected to have driven a marked decrease in the rate of weekly storage injections when the U.S. Energy Information Administration releases its next weekly inventory report at 10:30 a.m. ET on Thursday, May 24, that will cover the week ended May 18. Preliminary estimates call for builds to stocks in the low 80s Bcf.
According to the EIA's latest "Natural Gas Weekly Update" for the week to May 16, much of which will be reflected in the forthcoming storage report, an early jump in cooling demand and lingering demand for heating boosted overall consumption of natural gas by 4% week on week, likely limiting the amount of natural gas available to be moved into underground stocks.
The previous storage report week ended May 11 saw a 106-Bcf injection, marking the season's first triple-digit addition. That took total working gas stocks to 1,538 Bcf, or 821 Bcf below the year-ago level and 501 Bcf below the five-year average of 2,039 Bcf.
Weather as forecast suggests additional support for cooling load that should keep a lid on the pace of storage improvements, as updated National Weather Service forecasts for the six- to 10-day and eight- to 14-day periods continue to show above-average temperatures enveloping nearly the entire country. Average temperatures remain confined to portions of the Southeast, while below-average temperatures do not appear in outlooks.
Natural gas inventories would need to build by an average 12 Bcf/d to reach an end-of-season inventory topping 3.5 Tcf, according to the American Gas Association.
Helping to allay storage woes, however, is an elevated rig count that spells an impending growth in production. The total rig count in the week to May 18 reached 1,046, or 145 rigs above the corresponding week a year earlier.
Price action for natural gas booked Tuesday for Wednesday flow was choppy.
Regionally, Midwest next-day gas price activity added roughly 10 cents on the session to average $2.527/MMBtu, while Gulf Coast spot gas pricing logged an approximately 4-cent gain in transactions averaging $2.763/MMBtu. By contrast, West Coast day-ahead gas prices fell by almost 5 cents on average to an index at $1.764/MMBtu, as Northeast cash gas price action eased by less than 1 cent to an index at $2.358/MMBtu.

Looking at the key delivery locations, Chicago spot gas prices rose by about 13 cents on average to an index at $2.682/MMBtu, as benchmark Henry Hub day-ahead gas pricing shed around 1 cent to average at $2.760/MMBtu. PG&E Gate cash gas price action climbed by roughly 4 cents to an index at $2.991/MMBtu, as Transco Zone 6 NY hub activity notched a near 11-cent increase in deals averaging at $2.846/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.
