The energy markets remain in a state of volatility, but U.S. production has increased month-over-month and LNG (liquified natural gas) exports appear to have reached their max. After six weeks of healthy storage injections, U. S. natural gas storage is currently about 3% below the five-year average, for the same reporting week. Last week, the U.S. Energy Information Administration (EIA) reported an injection of 7 Bcf and early projections this week are for another small injection, during a time that often experiences a withdrawal. Above-average temperatures have limited natural gas demand for heating purposes and while cooler temperatures are expected for parts of the country, the cold air is not expected to last long and drive sustainable demand, yet. With mild temperatures, strong production, and LNG exports at capacity, the market has responded to this additional domestic supply and natural gas prices retreated last week below $5 per MMBtu, with the remainder of the winter strip following suit. The market continues to remain skittish; however, with any news coming from Europe, Russia, or China could threaten supply to meet winter demand. This time of year is driven significantly by weather forecasts and with the recent memories of Winter Storm Uri, there continues to be an opportunity for more bullish pressure available in this market.
