Is Spring finally here to stay? Winter was starting to feel like the house guest that had over-stayed his welcome! The colder temperatures appear to have finally pushed out and most of the U.S. is enjoying spring-like weather, and in some cases, summer-like temperatures. The West is already reaching triple digits and New York recently hit 90 degrees. Natural gas production is currently averaging near the all-time high and this week’s storage report exceeded market expectations. We have finally flipped to injections and while last week’s injection of 62 Bcf fell short of the five-year average of 69 Bcf, it was more robust than what was expected. Natural gas storage levels still remain 40.2% below last year’s level and 28.4% below the five year average. Mild temperatures should continue to lead to more robust storage injections, with the removal of heating demand from the market. Record high production levels are continuing to overshadow the fact that natural gas storage levels are well below the seasonal averages for this time. The May contract settled at $2.821 per MMBtu, moving the 2018 average down to $2.904 per MMBtu, which is nearly 11% below where NYMEX averaged this time last year. The June contract moved into the prompt position and is currently trading near the $2.75 per MMBtu level.
