Natural gas prices have edged back below the $3.00 per MMBtu level. After the July contract peaked at $3.053 per MMBtu during mid-June, the contract finally settled at $2.996 per MMBtu. The average seasonal peak for natural gas is June 15th and in the face of extreme heat, natural gas prices declined, leading analysts to believe that the market has reached its seasonal peak. Through July, natural gas prices for 2018 are averaging $2.913 per MMBtu and the EIA expects prices to average $2.99 per MMBtu for the calendar year. This week’s natural gas storage report showed an increase of 78 billion cubic feet for the week ending June 29th. Natural gas storage levels are currently 25% below last year and 18.6% below the five-year average, though this same week. With natural gas storage levels sitting at such a deficit to historical averages, the market continues to question whether or not we will have enough natural gas in storage, especially if we have another below-average winter. Estimates are that we will exit the injection season near 3.4 Tcf, well below the nearly 4 Tcf level that the market has experienced in recent years. With production pushing record-high levels, there continues to be bearish price pressure, to keep natural gas near or below $3.00 per MMBtu.
