Very Nice May Weather to Result in 3-5 Massive 100+ Bcf Builds

May 15, 2023: The weekend weather was little changed and still forecasts light to very light national demand through the end of May. This is expected to result in the next 3-4 EIA weekly storage builds printing over 100+ Bcf, with the potential the streak extends to 5 or 6 weeks without hotter trends in early June. Clearly, weather patterns are to the bearish side, and it doesn’t help the background state remains quite bearish with surpluses at +332 Bcf, while forecast to increase to +375 Bcf by the end of May. There will still be areas of heat to impact the US the next 15-days, including record breaking temperatures over the West Coast states early this week, where highs will reach the upper-80s and 90s. The Southwest will also be very warm going forward with highs of 90s and 100s much of the next 15-days. However, an active pattern over the Midwest, Plains, Texas, and the eastern US will bring areas of showers and thunderstorms, resulting in mostly comfortable highs of upper 60s to 80s apart from lower 90s over portions of the Southeast. What the nat gas markets are anxiously waiting to see is where power burns come in when widespread heat finally arrives, especially since there’s potential it proves stronger than expected and last year, a feat that would clearly be welcomed by most participants due to the current oversupplied environment.
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Nat gas prices were higher Friday after the Baker-Hughes rigs report showed a surprise plunge in natural gas rigs by 16 week over week and that led to a spike higher, which has continued further higher to open the new trading week.
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