Spring is upon us and the warmer temperatures these past couple of weeks have decreased demand for heating purposes. The U.S. Energy Information Administration (EIA) has reported two consecutive weeks of natural gas storage injections. Natural gas storage levels are currently sitting at 1,155 Bcf, which is 14% below last year at this time and 30% below the five-year average. Strong production has maintained slightly bearish pressure on natural gas prices, which overall, continue to trade in a tight range. According to EIA’s recent Energy Outlook, they are expecting Henry Hub natural gas spot prices to average $2.82 per MMBtu in 2019, which is 33 cents below the 2018 average. The April contract settled at $2.713 per MMBtu, nearly 5% below the March contract, and moved the 2019 average down to $3.040 per MMBtu. Overall, EIA is forecasting that natural gas production will average 91 Bcf per day in 2019, a year-over-year increase of 9%, and continued growth in 2020 to 92.5 Bcf per day.
