Mild weather to weigh on Henry Hub prices

By Abhishek Kumar 14 June 2017
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Front-month futures and spot gas prices at the Henry Hub have come under pressure because of a mild start to the summer in the United States. Forecasts for below-average temperatures in key demand centres over the coming week will cap gains in prices. This will also help boost gas injection rates in the South Central Region (SCR) of the US, which houses the Henry Hub pricing point, and will be another bearish factor for prices.

Forecasts suggest the eastern US has a 35% chance of below-average temperatures in the next 6-10 days, which will dampen air conditioning-related gas demand in the region. However, the western half of the country has a 45% chance of above-average temperatures in this period. The US as a whole is expected to see an average Total Degree Days figure of 268F in June 2017, lower than the 292F average seen in June 2016. GGA forecasts the country’s weather-related gas demand will decline by 7.2% year on year in June, to 32 billion cubic metres.

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