Reasons to Buy:
- Weather normalized demand continues to grow.
- Both takeaway capacity from the Northeast and LNG export capacity are increasing.
- Moving into warmer months, cooling demand will have an increasingly stronger influence.
Reasons to Wait:
- Current forecasts for average summer temps may keep 5 year surplus intact heading into winter.
- With natural gas production growth projected and significantly higher rig counts versus last year, the market could fall if incremental demand doesn’t keep up.
Gas Market Highlights:
- This week was the 9thstorage report and 9th injection of the 2016-17 Injection Season. Injection (106 BCF) was below analysts’ expectations (90-105). Storage is now 332 BCF below last year’s level and 237 BCF above the 5 year average.
- Year over year deficit has decreased 10.3% since last week.
- Surplus over 5 year average has increased 5.3% since last week.
- July 2017 NYMEX closed at 3.044 after opening at $3.034.
- Next 7 days:
- 0-6 above normal in the Northeast and Midwest, 0-3 below in the Southeast.
- Week following:
- 1-2 degrees above normal in the Northeast, 0-3 below normal in the Midwest.
Note: Although natural gas does not necessarily indicate where electricity pricing is at, it is good as a general barometer for electricity markets as a whole. When gas gets expensive, so does electricity generated from natural gas.