Natural Gas Turns Focus To Another Supportive EIA Print

June natural gas prices rallied a bit less than a percent and a half to kick off the month of May, bouncing off the $2.75 level they settled just above yesterday.

The entire strip participated today, as we noticed isolated strength in the November contract as well as with the prompt month June contract.

As we showed in our Morning Update, yesterday's price weakness was limited just to the front of the strip, with the prompt month leading a recovery later in the day.

This was a trend that continued today as well, with the June/July M/N natural gas spread moving narrower as the prompt month June contract continued to lead the way higher over the rest of the strip. Cash prices found some strength today as well.

Today's rally comes ahead of Thursday's EIA print, which is expected to show the first weekly storage injection of the year. As outlined in today's Seasonal Trader Report for subscribers, average weather will result in significant storage builds moving forward, though storage levels will remain significantly below the 5-year average through May.

This Thursday's print covers a week where we saw significantly less weather-driven demand, with GWDDs falling quite a bit week-over-week. This explains why we are now expecting a sizable injection into storage to be announced instead of the storage draws we have been seeing recently.

Already we have seen reports of storage injections too, with Dominion reporting a 5 bcf injection into storage for the week ending April 26th.

Yet even with this weather fall-off, we are currently predicting the upcoming injection to be decently lower than the 5-year average (as seen below in this morning's Morning Update).

This has continued to raise concerns that storage will not be filled in time for next winter, which has helped keep natural gas prices bid over the last few weeks. In our Afternoon Update we went through not just this Thursday's EIA print but also what our expectation for EIA data through May likely means for price risk along the natural gas strip moving forward. We also looked closer at spreads to determine short and medium-term price risk and catalysts, and in our Seasonal Trader Report published every Tuesday looked at how our June, July, and August weather forecasts were likely to skew seasonal price risk.