Henry Hub natural gas futures for May are trading at US$2.66/MMBtu as of 1:00pm EDT Thursday afternoon. Prompt-month futures moved higher this week, up 5.3% from last Friday’s close of US$2.526/MMBtu, as cooler temperature forecasts remain in place for mid-to-late April and strong liquified natural gas (LNG) exports continue to support a tight supply/demand balance. The EIA estimated working gas storage was 1,845 Bcf for the week ending April 9th, 2021, following an injection of 61 Bcf. This bullish report is lower than market expectations that averaged 67 Bcf, pushing prices up from this morning’s low of US$2.583/MMBtu. Storage levels are now 11 Bcf or 0.6% above the five-year average but 11.6% below year-ago levels.
In other news, the US Energy Information Administration (EIA) increased its rest-of-year US natural gas consumption forecasts on April 6th, even as higher prices are projected to lower natural gas consumed for electric power generation. In the April Short-Term Energy Outlook, the EIA raised its gas consumption estimates by 1.53 Bcf/d to 71.78 Bcf/d for the second quarter of 2021, and by 1.65 Bcf/d to 73.61 Bcf/d for Q3. The EIA expects natural gas consumption in the United States will decrease by less than 1% in 2021 and reports rising consumption outside of power burn is a result of colder temperatures in 2021 compared to 2020, and expanding economic activity.
In Canada, prompt-month futures for AECO are trading at C$2.59/GJ, while Dawn is trading at C$3.00/GJ. Prices are continuing to track upward, with week-over-week increases of $0.15/GJ and $0.12/GJ at AECO and Dawn respectively. Canadian natural gas storage for the week ending April 9th, 2021 was sitting at 344 Bcf, after an overall injection of 11 Bcf. This first injection of the season increases storage inventories to 34 Bcf below the 5-year average and 19 Bcf above storage levels last year at this time.
– Karyn Morrison, Energy Advisor
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