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June gas meanders as inventories build, weather moderates

Aftera 7.5-cent decline in its debut session in the lead slot April 28 to a settleat $2.078/MMBtu, the fresh front-month June natural gas futures meanderedovernight ahead of the Friday, April 29, open, as the market continued todigest the larger-than-expected build to stocks in the latest storage reportand moderating weather in forecasts that should trim demand and allow foradditional large inventory injections in the coming weeks.Spanning $2.056/MMBtu to $2.088/MMBtu, the contract was last eyed 0.3 centlower at $2.075/MMBtu.

TheApril 28 U.S. Energy Information Administration storage data outlined a net73-Bcf injection tostocks for the week to April 22 that took total inventories to 2,557 Bcf, or 870Bcf above the year-ago level and 832 Bcf above the five-year average of 1,725Bcf. The reported addition to storage was within the full range ofestimates coming intothe day that had called for a build from 62 Bcf to 81 Bcf, but above theconsensus formed at a 70-Bcf injection. Although smaller than the 84-Bcfaddition to stocks seen at the same time last year, it outperformed the 52-Bcffive-year-average build.

Theweek's data marked a significant uptick in the rate of weekly storageinjections after a slow start to the inventory refill season, and thisaccelerated pace of stock rebuilding is expected to be encouraged by moderatingweather in store that should keep demand subdued and allow for natural gas to flowmore freely into underground storage facilities.

Theupdated National Weather Service outlook for the six- to 10-day period reflectsbelow-average temperatures over the bulk of the East, nearly all of thesouth-central U.S. and portions of the Southwest, accompanied by averagetemperatures over much of the Northeast and a narrow band stretching across theMidwest into the fringes of the Gulf Coast and a section of the Southwest.Above-average temperatures are indicated for the coastal borders of the Northeast,most of the west-north-central U.S. and Northwest.

Below-averagetemperatures significantly shrink in scope in the eight- to 14-day period to becontained to a majority of the Gulf Coast and parts of the Southwest, asabove-average temperatures overtake nearly the entire northern tier of thecountry. Average temperatures span portions of the West, the balance of theGulf Coast and bulk of the Southeast.

Atthe cash markets, natural gas trading activity that was revised to feature atwo-day offering for Friday-Saturday flow in order to accommodate the start ofthe new month was thoroughly mixed amid regional variations in demand outlooks.

Lookingat the major delivery locations, a near 18-cent decline was seen drivingTransco Zone 6 NY spot gas price action to an index at $1.405/MMBtu, as adowndraft of about 5 cents took PG&E Gate hub pricing to an average at$1.982/MMBtu. Conversely, an increase of almost 2 cents brought Chicagoday-ahead gas price activity to an average at $1.945/MMBtu, as a 1-cent gainsteered benchmark Henry Hub cash gas pricing to an index at $1.890/MMBtu.

Regionally,Northeast next-day gas pricing was off about 11 cents at an index at$1.819/MMBtu, while West Coast and Midwest cash gas prices were up by almost 1cent on average at indexes at $1.669/MMBtu and $1.880/MMBtu, respectively. GulfCoast spot gas price activity was down by roughly 2 cents at an average at$1.820/MMBtu.

Marketprices and included industry data are current as of the time of publication andare subject to change. For more detailed market data, including power and natural gas indexprices, as well as forwards and futures, visitour Commodities Pages.