U.S. natural gas futures have surged toward $3.4 per MMBtu, approaching three-week highs. This increase is attributed to reduced production and record levels of LNG exports. Meanwhile, traders are eagerly anticipating the delayed weekly storage report from the EIA, which is projected to reveal a larger-than-usual storage build of 107 billion cubic feet (bcf) for the week ending April 25, primarily due to mild weather suppressing demand. This figure would exceed last year’s 64 bcf increase and the five-year average of 58 bcf, potentially bringing storage levels close to seasonal norms.
Contributing to the price support, production has decreased by 3.5 billion cubic feet per day (bcfd) over the past four days, reaching a two-month low of 102.0 bcfd. Additionally, LNG exports set a new record average of 16.0 bcfd in April, bolstered by increased exports to the under-construction Plaquemines facility.
Looking ahead, meteorologists forecast that temperatures across the Lower 48 states will generally remain warmer than usual through May 16. Analysts indicate that the continuing mild weather and high production levels could result in record storage injections throughout May.
