Prices are continuing to find support this week as the forward curve shifted up another 5 cents late yesterday afternoon with front month prices rallying up to $2.61/MMBtu. Colder than normal spring temperatures are providing support to weather-driven demand which in turn is fueling upward price action.
With a relatively large injection anticipated by the market coming later this week, it seems traders are moving past storage and giving more emphasis to diminishing production that has a 7-day average near 90.7 Bcf/D.
Low levels of production like this have not been seen since November of last year (excluding the February winter freeze event).
This should provide some upward momentum in the short term, however, if the upcoming cold snap dissipates quickly, then storage will become the bigger focus for the market.
Source: Gelber & Associates
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