In an EBW Analytics Group report sent to Rigzone by the EBW team today, Eli Rubin, an energy analyst at the company, highlighted that the June natural gas contract “jump[ed]… into [the] NYMEX front month role”.
“The May contract rolled off the board at $3.170 yesterday as natural gas buyers awakened from a month-long slumber,” Rubin noted in the report, which highlighted that the June natural gas contract closed at $3.343 per million British thermal units (MMBtu) on Monday. That close was up 22.9 cents, the report pointed out.
“While the near-term fundamental outlook remains very soft and Henry Hub spot gas prices averaged $2.94 per MMBtu, the magnitude of gains yesterday reset technicals on a path that could reach $3.50 per MMBtu,” Rubin said in the report.
“Early-cycle production readings declined this morning but LNG readings are ticking higher. Weather-driven demand remains weak,” Rubin added.
The EBW analyst noted in the report that bearish shoulder season fundamentals are not unexpected, however, and added that they have been increasingly priced in during recent weeks.
“Instead, near-term price action appears more likely a relief rally after a $1.60 per MMBtu (- 34 percent) collapse in the June contract over the past seven weeks,” Rubin said in the report.
“If the rally extends higher, however, fundamental loosening could prove too much, too soon – and may lay the groundwork for a retest of support before the shoulder season is through,” Rubin went on to warn in the report.
In a separate EBW report sent to Rigzone by the EBW team on Monday, Rubin highlighted that May contract final settlement was “dominat[ing]… near-term trading”.
“The May natural gas contract gained on Friday during its options expiration – but has now tested technical support within a penny of $2.86 per MMBtu intraday in three straight sessions,” Rubin said in that report.
“Even with a supportive cool front, however, weekend Henry Hub spot gas prices averaged just $2.73 per MMBtu. Marcellus spot prices are struggling to sustain $2.00,” Rubin added.
“Weather-driven natural gas demand is decreasing rapidly this week. Permian production readings are bouncing higher with the end of maintenance on the Permian Highway Pipeline,” Rubin warned in that report.
“A minefield of triple-digit weekly injections appears ahead, while technicals for the June contract generally point towards continued declines,” Rubin said.
In this report, Rubin went on to note that “dramatic recent losses at the front of the curve may set up profit-taking by shorts as the June contract becomes the NYMEX front-month”.
Rubin warned in that report that “fundamentals may remain weak for most of May, however, before chances for a more durable rebound in NYMEX futures improves into early summer”.
In a BMI report sent to Rigzone by the Fitch Group on Friday, BMI projected that the front month Henry Hub natural gas price will average $3.40 per MMBtu in 2025 and $3.80 per MMBtu in 2026. The commodity averaged $2.41 per MMBtu in 2024, the BMI report highlighted.
The U.S. Energy Information Administration (EIA) increased its Henry Hub natural gas spot price forecast for 2025 and 2026 in its latest short term energy outlook (STEO), which was released on April 10.
According to its April STEO, the EIA now sees the Henry Hub spot price averaging $4.27 per million British thermal units (MMBtu) in 2025 and $4.60 per MMBtu in 2026. In its previous STEO, which was released last month, the EIA projected that the Henry Hub spot price would average $4.19 per MMBtu in 2025 and $4.47 per MMBtu in 2026.
To contact the author, email andreas.exarheas@rigzone.com
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