Henry Hub Extends Rally on Warm Weather and Lower Production

Henry Hub natural gas is again edging higher today supported by lower production levels and a warmer outlook ahead of the updated US inventory data. Front month has rallied from a low of around 2.14$/mmbtu late last week.

• US Natgas JUL 23 up 1.3% at 2.36$/mmbtu
• The latest EIA weekly gas inventories for the week ending 2 Jun will be released this afternoon at 10:30 ET (15:30BST). The expectation is for another larger than normal build of +114bcf compared to last week at +110cf and the 5-year average for this time of year is +103bcf.
• Above normal temperatures in the Gulf Coast region in the 6-10 day period are forecast to expand northward across the whole central and eastern areas in the second week of the outlook. Domestic demand is today still holding above average at 66.8bcf/d according to Bloomberg.
• Domestic production has drifted lower in the last week down to 99.2bcf/d today compared to an average of nearly 101.2bcf/d during May.
• Delivery flows to the US LNG export terminals are largely unchanged from yesterday at 11.7bcf/d and near the lowest since the start of the year due to reduced supplies to Sabine Pass due to maintenance.
• Export flows to Mexico are today estimated up at 6.7bcf/d.