Henry Hub Extends Rally Towards Highest Since March

Henry Hub extends the weekly gains towards the highest since March of 2.68$/mmbtu seen on 19 May. Stronger global gas prices have added to a reduction in US production this week, a smaller than expected inventory build and warm weather on the Gulf Coast boosting cooling demand to give upside pressure to prices. Curtailed LNG export flows due to maintenance have limited some of the move.

• US Natgas JUL 23 up 2% at 2.58$/mmbtu
• The EIA weekly gas inventories for the week ending 9 June showed a below expected build of +84bcf compared to the 5-year average for this time of year of +96bcf. Total US inventories are still above the five year average at 2,634bcf compared to the average of 2,263bcf.
• Domestic production is today at 98.8bcf/d compared to an average of 101.2bcf/d in May and 100.4bcf/d in the first 10 days of June due to pipeline outages.
• The latest NOAA weather forecast is relatively unchanged although below normal temperatures on the west coast have moved back slightly closer to normal. Above normal temperatures are still expected in the Gulf Coast and central regions and below normal on the east coasts. Domestic demand is unchanged from yesterday at 68.0bcf/d according to Bloomberg.
• Delivery flows to the US LNG export terminals are today slightly higher at 11.3bcf/d having fallen to the lowest of the year of 10.16bcf/d on 14 June according to Bloomberg. Maintenance at Sabine Pass LNG has limited flows so far this month.
• Export flows to Mexico are today estimated up at 6.7bcf/d.