US Gas Follows Europe Higher With Support from Production Dip

US front month Henry Hub trades up to the highest since late May as European gas continues to surge higher on tight market concerns. A reduction in US production this week and warm weather on the Gulf Coast boosting cooling demand are supportive of US natural gas while LNG export flows remain curtailed due to maintenance.

• US Natgas JUL 23 up 3.1% at 2.41$/mmbtu
• The latest EIA weekly gas inventories for the week ending 9 Jun will be released this afternoon at 10:30 ET (15:30 BST). The expectation is for a build of +94bcf in line with the seasonal normal of +96bcf. Last week showed a build of +104cf with another +14bcf injected to non-salt inventories and reclassified from working gas to base gas.
• Domestic production is today at 98.6bcf/d compared to over 101bcf/d on 11 -12 June due to pipeline outages.
• The US weather forecast is just slightly cooler than seen yesterday but is still showing above normal temperatures expected in the Gulf Coast and central regions and below normal on the east and west coasts. Domestic demand higher today up to 68.0bcf/d according to Bloomberg.
• Delivery flows to the US LNG export terminals are today at 10.8bcf/d having fallen to the lowest of the year of 10.16bcf/d yesterday according to Bloomberg with a drop in Freeport LNG flows adding to the ongoing maintenance at Sabine Pass LNG.
• Export flows to Mexico are today estimated up at 6.8bcf/d.