North America gas short-term outlook: Winter price premia added back quickly

Henry Hub prompt month gas prices rallied quickly to $2.70/mmbtu after continuing its summer spiral downward barely above $2.00/mmbtu in early August. Although tempering in recent days and forecasted to settle at $2.50/mmbu, a near 50 cent price rally was brought upon by extended warmth, an over weighted financial short positioning reducing exposure, and some signs of stymied production growth. We have maintained that it was too early to discount the upcoming winter and not surprised that we have added back the winter price premia. Further out the curve, Henry Hub prices have appreciated less with likely producer hedging at play. Our end of March 2020 storage levels return back above the five-year average. With shoulder season and falling demand levels upon us, will Henry Hub prices maintain its recent gains? Extended October warmth raises power demand but delays larger heating loads.