North America gas markets short-term outlook: Tenuous path ahead for Summer 2021 gas prices

After a roaring cold February, March is proving disappointing to gas market bulls. Unsurprisingly, the April prompt contract continues to lose ground, at times testing the floor of $2.50/mmbtu. Withdrawal season looks to be coming to an early close, with double-digit salt injections continuing for the third consecutive week due to falling heating loads, impaired industrial demand and outperforming production. Summer prices will receive support from LNG and Mexican exports, but there are questions around US gas production. How strongly will producers continue to focus on capital discipline? We are watching intently for a spring fall-off as we enter the injection season; if not, or if delayed, Henry Hub may fall further.