Mild weather continues to conspire against the North American gas market. But if and when weather turns normal, a significant gas price rally will be in store, as this gas market remains under-supplied. Industrial demand is growing, exports to Mexico are rising even if not quite as much as expected, imports from Canada are falling, and most significantly, gas demand for LNG exports continue to ramp up. Yet LNG exports may cannibalize some piped exports to Mexico, and Eagle Ford drilling continues to rise, contributing to what may be the highest ever five-month period of supply growth. Even with this record-strong supply growth and modest outlook for summer gas burn, storage inventories will not fill to the 3.8 tcf inventory level the market is currently pricing in. If weather is normal—and this year highlights the risk if it isn’t—we expect prices to rally and average about $3.30/mmbtu for the July-October period, more than $0.30/mmbtu over the current market.