The latest EIA report showed a 101 Bcf storage injection for the week ending May 23, exceeding the five-year average of 98 Bcf. Total gas in storage now stands at 2,476 Bcf—3.9% above the seasonal norm and narrowing the year-on-year deficit to 11.7%. This marks three consecutive weeks of injections over 100 Bcf, underlining how production continues to outpace demand.
Production remains elevated. Lower 48 dry gas output held steady near 106 Bcf/day, up roughly 3.8% from the same period last year. Even as rig counts hover near multi-year lows, producers continue to push strong volumes into the market. Supply is further overwhelming infrastructure in regions like the Permian, where constrained takeaway capacity is putting pressure on regional prices.
Will Cooler Weather Continue to Limit Early Summer Demand?
Weather has remained a bearish factor throughout the week. Forecasts from NatGasWeather and Commodity Weather Group point to cooler-than-normal conditions across much of the central and eastern U.S. through early June. Highs in key demand centers, including Texas and the Midwest, are expected to stay in the 60s to 70s—levels insufficient to trigger strong cooling-related demand.
Power sector consumption continues to lag. The Edison Electric Institute reported a 4.4% year-over-year decline in total electricity output for the week ending May 24, reflecting lower gas burn for power generation. While a potential warming trend is forecast for the second week of June, it is not yet significant enough to alter the near-term demand picture.
Can LNG and Export Demand Provide a Lift?
LNG exports edged higher to 14.4 Bcf/day last week, a 2.4% increase week-over-week, offering modest support. However, global demand signals remain subdued. European gas storage was 47% full as of May 26, well below the five-year seasonal average of 58%, limiting any immediate upside from transatlantic demand. Pipeline exports to Mexico remain stable but are not growing fast enough to change the broader balance.
Market Forecast: Bearish Outlook Persists on Supply-Demand Imbalance