Market Fundamentals Are Still Not Enough To Push Natural Gas Prices Even Higher

Natural gas prices are rallying today on the heels of a better-than-expected storage report. EIA's report showed an injection of 14 Bcf versus our estimate of 18 Bcf. Despite the latest price rally, fundamentals are still not strong enough to warrant a larger price move higher.

Looking at our storage projections, natural gas fundamentals have indeed tightened materially over the past few weeks. This is in large part thanks to hotter than normal weather and LNG gas exports returning.

The fundamental balance is expected to be ~2 Bcf/d tighter than the 5-year average. We see injections being lower than the 5-year average in the next 4 weeks.

So why aren't fundamentals good enough to warrant even higher prices?

This is the problem...