This week is still hot. NatGasWeather has a ridge building across the southern, central, and eastern United States.\u00a0Highs in the 80s and 90s for most of the country.\u00a0The Southwest pushes into the 100s.\u00a0Chicago and the Ohio Valley could touch the 90s by mid-week.\u00a0That is real air conditioning load. The Edison Electric Institute backs it up. U.S. Lower-48 electricity output for the week ended May 30 climbed 6.4% from a year earlier to 81,619 GWh.\u00a0Power demand is not the problem. The problem is that none of this week\u2019s heat is a surprise. Traders already own it. They sold Monday because the weeks they did not own yet got cooler.\u00a0The June 13-22 revision is the trade.\u00a0Not this week\u2019s thermometer.<\/p>\n
Storage Build Came in Light but the Cushion Is Still There<\/p>\n
The 95 bcf build for the week ended May 29 came in below what anybody expected. The Street had 99. The five-year average was 101.\u00a0That is a bullish print on paper.\u00a0The problem is what sits underneath it.<\/p>\n
U.S. inventories are still 5.7% above the five-year seasonal average.\u00a0Down just 0.8% year-over-year.\u00a0Nobody is worried about running short domestically.\u00a0The cushion is real. Europe does not have that luxury.\u00a0European gas storage stood at 42% full as of June 6.\u00a0Should be closer to 57% by now based on seasonal norms.\u00a0Fifteen percentage points below where they need to be heading into summer restocking.\u00a0That gap is why U.S. LNG cargoes keep moving at strong rates.\u00a0Europe is buying everything it can get.\u00a0Domestic storage tells one story.\u00a0The European deficit tells the opposite one. Both are trading at the same time.<\/p>\n
Ras Laffan Keeps the LNG Floor in Place<\/p>\n
LNG feedgas demand is doing the work that weather is not. Estimated net flows to U.S. export terminals hit 17.6 bcf per day Monday. Up 4.0% from the prior week. Every barrel of gas that goes onto an LNG tanker is a barrel that does not sit in domestic storage. At 112 bcf per day of production that matters.<\/p>\n
The global shortage is real. The Strait of Hormuz closure has choked off Middle Eastern natural gas exports.\u00a0Europe and Asia are scrambling for replacement cargoes.\u00a0Qatar reported extensive damage at Ras Laffan Industrial City on March 19.\u00a0The world\u2019s largest natural gas export plant. Iran\u2019s attacks took out 17% of the facility\u2019s LNG export capacity.\u00a0Repairs could take three to five years.\u00a0Ras Laffan handles roughly 20% of global LNG supply.\u00a0That outage is not a headline anymore.\u00a0It is a structural hole in the global market. U.S. exporters are filling it. That floor underneath July Nymex natural gas is not going away even on cooler domestic forecasts.<\/p>\n
112.1 Bcf per Day Is a Heavy Number<\/p>\n
Production keeps growing into a market that needs heat to absorb it.\u00a0BNEF had Lower-48 dry gas output at 112.1 bcf per day Monday.\u00a0Up 3.7% year-over-year. Near record territory.\u00a0The Energy Information Administration made it worse.\u00a0Raised the 2026 production forecast to 110.61 bcf per day from the April estimate of 109.60. The supply side is not cooperating with the bulls.<\/p>\n
Baker Hughes reported one rig came off the count last week.\u00a0Total active natural gas rigs dropped to 124 for the week ending June 5.\u00a0Down from the 2.5-year high of 134 in late February.\u00a0Still sitting well above the 94-rig low from September 2024.\u00a0One rig does not change the supply picture.\u00a0Output this heavy means every rally that is not driven by sustained heat runs out of room fast.\u00a0Sellers know that. It is why follow-through on hot weather spikes has been short-lived all year.<\/p>\n
What to Watch<\/p>\n
Weather is the only variable that moves July Nymex natural gas this week.\u00a0The current heat is priced. What matters is whether the cooler revisions for June 13-22 hold or reverse. Hotter revisions flip the bid back on fast.\u00a0Cooler revisions keep sellers in control.\u00a0Production at 112.1 bcf per day caps every rally that is not driven by sustained heat. The Ras Laffan outage and strong LNG flows give the market a floor underneath the selling.\u00a0Last week\u2019s light storage build helps but domestic inventories are still 5.7% above the five-year average.\u00a0The cushion is there. Traders are watching the forecast models daily and trading every revision in real time.<\/p>\n
My read on this is the 50-day moving average at $3.122 is the line. The market respected it Monday. Below $3.085 the selling picks up speed toward $2.978.\u00a0Above $3.248 the bulls take the wheel and the conversation shifts toward the breakout level at $3.387.\u00a0The 200-day moving average at $3.612 is the upside target if a sustained heat event takes hold.\u00a0Until the June 13-22 forecast window settles, July Nymex natural gas trades sideways between the 50-day and the $3.248 pivot.\u00a0The forecast models decide the direction.\u00a0Not production. Not storage. The weather.<\/p>\n","protected":false},"excerpt":{"rendered":"This week is still hot. NatGasWeather has a ridge building across the southern, central, and eastern United States.\u00a0Highs…\n","protected":false},"author":2,"featured_media":484711,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[2791,2792,2794,42,33991,144904,28757,43,224370,2797,40,38,41,39],"class_list":["post-484710","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-commodities","tag-daily","tag-fundamental","tag-headlines","tag-home-page-4","tag-james_gas_forecast","tag-natural-gas","tag-news","tag-publish-tweet","tag-technical","tag-top-news","tag-top-stories","tag-topnews","tag-topstories"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/484710","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=484710"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/484710\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/484711"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=484710"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=484710"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=484710"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}