North America gas weekly update: peak summer hopes fading

Weather giveth and weather taketh away—yet again. Last week’s triple digit heat index in the Midwest, East and Southeast helped cause a 36 bcf injection, the lowest of the summer. However, once more, heat has failed to persist, and the summertime blues for prices have reappeared. Low prices are the cure for low prices, though. Despite production having recovered and hitting new records in the Northeast, Q2 2019 earnings season is in full swing, and producers are starting to give lower guidance. We have seen Northeast producers shut in at these levels before, and we think more curtailments are likely to be announced. From the demand side, economic coal displacement and record exports are combatting these record high production levels—and losing to production for now.