North America gas markets short-term outlook: Market focus already shifts to this summer

With no lasting cold to excite prices, market attention has already started to shift to the summer. The expected end-of-season storage level should now have enough stock to handle remaining peak withdrawals, so the question now becomes what price is necessary to incentivize production without backing out gas’s gains in the power sector. Global price differentials, off the back of a cold winter and quickly depleting gas storage levels in Asia and Europe, have reduced the risk of another US LNG pushback this summer, and with production still lower year-over-year at the moment, prices have to be higher in order to balance the market. But what price is high enough to do so without replacing gas power burns with coal?