- US natural gas storage has fallen below the five-year average for the first time since November 2019.
- While extreme cold in mid-February drove the second-largest one-week drawdown in US gas storage since 1999, gas withdrawals are much higher than can be explained by the weather alone.
- US associated gas production accounts for roughly 40% of total output and will remain contained in 2021-22 as oil producers focus on free cash flow over production growth.
- US LNG exports will remain supported by pricing differentials between the US and European and Asian LNG markets.
- I see the potential for US gas prices to average above $3/MMBtu through the summer of 2021, driving significant upside for the US Natural Gas Fund (UNG).
For further details see:
U.S. Natural Gas Fund: Spring For Gas