Natural gas prices for 2018 continue to average below where prices settled during 2017. The June contract rolled off the board at $2.875 per MMBtu, 11% below the June 2017 settlement. For the first half of 2018, natural gas prices have averaged $2.899 per MMBtu, compared to $3.2501 per MMBtu in 2017. The market continues to react quickly to news of strong production, increased demand, and changing weather forecasts, which is keeping natural gas prices range-bound. The month of May experienced significant heat in parts of the U.S., especially in the Midwest, driving an increase in demand for cooling purposes. Recently, updated weather forecasts are starting to show a cooling pattern which has helped keep pricing below the $3 per MMBtu level. This week’s natural gas storage report showed an increase of 92 billion cubic feet for the week ending June 1st. This was near analyst expectations, but similar to recent weeks, the injections continue to be below the five-year average injection, which for this same time last year was 104 bcf. Natural gas storage remains 22% below the five-year average and is 30.5% below this time last year.
