North America gas markets short-term outlook: A hot start to the summer

A record setting hot May continues to stymie shoulder season injections. In addition to the hotter than normal temperatures, the continued disappearance of economic gas to coal displacement at higher gas prices have elevated gas burns. Without its traditional short-term summer balancing mechanism, Henry Hub gas prices continue to correlate to even higher global gas prices. Under a cold winter scenario, some LNG exports may need to be pushed back into the domestic grid this winter. Haynesville and Permian growth engines are revving up. Various brownfield and greenfield takeaway capacity projects have been announced to support continued growth in the years ahead. However, more is necessary with the Northeast seemingly side-lined due to continued capital discipline and the lack of new takeaway capacity. Higher oil and gas prices are providing a supply response to balance markets, even if muted and taking time to roar again. Until then, Henry Hub gas prices remain elevated and volatile.