Below-average temperatures in parts of the United States will continue to support regional gas prices over the coming week. Weaker gas stock levels in the US compared with last year will also remain a concern as summer approaches, despite improving storage injection rates. This in turn will be a bullish factor for Henry Hub prices.
Forecasts suggest a 55% chance of below-average temperatures in the western half of the US in the next 8-14 days. Southwestern parts of the country are being particularly affected by the cold weather. Temperatures in southern California are 10-20F (5.5-11C) below average for mid-May, which will continue to support regional gas prices. Consequently, the SoCal border gas price has averaged $2.8/MMBtu so far in May 2017 compared with $1.85/MMBtu in May 2016.
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