North America gas weekly update: Moderation of warmth

Henry Hub remains resilient, despite a slight moderation of forecasted warmth. Even with the higher prices, gas burns remain on par with last year’s so far, but can this really be expected to last into July, where we saw astronomical burns? Still, if gas-to-coal displacement proves more “sticky”, Henry Hub gas prices could surprise to the upside. Add to that outperforming Mexican exports and slightly lower production week-over-week, and you’ve still got a moderately tight market, despite seasonally lower LNG feed gas levels. With the expected moderation of CDDs over the next few weeks, injections will normalize, but we are nearing the peak summer heat of July and August.