The dreaded shoulder season is coming to an end for natural gas. Nothing material usually takes place during the quiet months (April/May, September/October). Following the Iran conflict and the closure of the Strait of Hormuz, our original premise was that a spike in global LNG prices would also push Henry Hub higher. This turned out to be incorrect as we had a record warm finish to the 2025-2026 winter heating demand season.
For the past two months, prices have been flat.
In this write-up, I’m going to give you a breakdown of the following:
Where are fundamentals today?
Is there a trade setup?
What about natural gas producers?
Where are fundamentals today?
Natural gas storage today stands at 2.29 Tcf, a 140 Bcf surplus relative to the 5-year average of 2.15 Tcf.
Our storage projection puts natural gas storage at 2.758 Tcf by June 12 week. The relative surplus is expected to remain the same, as fundamentals remain neutral over the coming weeks.
Cooling demand is not expected to kick off until early June, so from a catalyst perspective, we won’t see any meaningful signs of tightening until warmer-than-normal weather.