US Natgas Steadies After Rally on EIA Storage Data Amid Supply Concerns

US Henry Hub is edging lower after a strong rally yesterday triggered by a below expected EIA storage inventory build amid concern for tighter supplies.

• US Natgas JUN 23 down -1% at 2.57$/mmbtu
• The front month contract has strongly rallied this week from a low of nearly 2.15$/mmbtu on 12 May following the big drop in gas rig count data raising concern for US drilling activity.
• US natural gas supply has declined 0.4% from the previous week driven by lower net imports from Canada according to the EIA. Domestic production has been holding steady around 100.3bcf/d in the last week.
• The latest EIA weekly gas inventories yesterday showed a smaller build of +99bcf than the expected +108bcf build and compared to the five-year average for this time of year of +95bcf. Total US inventories are however still near the top of the five year range for the time of year.
• Domestic demand has dipped today but still above normal at 62.9bcf/d according to Bloomberg with above normal consumption for power generation. The US weather forecast is unchanged from yesterday with above normal temperatures across much of the country in the 6-14 day period.
• Delivery flows to the US LNG export terminals have dipped in recent days down to 12.45bcf/d today according to Bloomberg mostly due to a reduction in supply to Corpus Christi.
• Export flows to Mexico are today estimated unchanged at 6.4bcf/d.