This analysis is by BI Senior Industry Analyst Vincent G Piazza.
Demand during summer isn't likely to provide much relief for natural-gas balances if longer-term weather patterns hold through September. We fear the winter 2020-21 futures strip at more than $2.75 per million BTUs may be overly optimistic. While much of the West and New England may be warmer than expected, the Midwest may be closer to normal.
Estimates for cooling degree days, demand proxies for the key gas-consumption summer months of June-September, are about 6.4% below last year, 3.5% below the 10-year average and could fall further if projections turn cooler during the season. Output peaked at more than 96 billion cubic feet a day (bcfpd) in November 2019 and will likely average about 4.5 bcfpd less than 2019. We expect elevated storage of 4.1 trillion cubic feet before winter draw season begins on November 1.