Natural gas prices pulled back from the weekly price high today following release of the weekly storage report which showed a 56 Bcf build, near the lower end of pre-report estimates.
Gas injected into storage over the first 6 weeks of the injections season has totaled 213 Bcf, 30 Bcf or 12% lower than the 5-year average over a similar time period. But while injections have been lower, total storage of 2,681 Bcf in on pace to reach a new all-time high by the end of the year.
Injections have been slightly below average and summer heating demand appears ready to pick up with the latest 6-10 and 8-14 day forecasts showing above-normal temperatures across much of the U.S. The below-normal temperatures forecast earlier this week have now been pulled out of the forecasts.
Interesting to note that the back end of the price curve has been weakening as the calendar 2017 and 2018 strips have fallen from the early-May high even with recent strength in the nearby dated contracts.
The calendar 2017 and 2018 strips bottomed in late-February, several days before the spot contract bottomed on March 7th. If recent weakness on the back of the natural gas price curve continues, it could be an early warning that a summer top is in place.
Once a top does form, a retest of early year lows is expected. As shown in a past report, the average price break during the summer following an El Nino winter has been 34% over the 5 years shown.
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