US natural gas inventories increased by 60 Bcf for the week ending April 30, compared with the five-year (2016–2020) average net injection of 81 Bcf and the market consensus of 65 Bcf. Working gas stocks total 1958 Bcf, which are 61 Bcf lower than the five-year average and 345 Bcf lower than last year at this time. Storage levels are trending lower than last year at the same time and with above normal heating demand for parts of the country in the coming week the disappointing injection levels are likely to continue in the near future. Daily production remains lower than last year at the same time so the likelihood of injections above last year or the 5 year average seems increasingly unlikely. While the balance of 2021 is tempting or above the $3.00/dth level, prices in 2022 -2025 remain unchanged and relatively affordable with close to a $0.40/dth discount for the outer years.
End users with exposure to natural gas prices for the next few years need to practice diligent and prudent risk management. With exceptional value currently seen in the deferred years, end-users need to be FORWARD thinking to manage their long-term risk exposure to the natural gas market.
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