Near-term temperature forecasts still look conducive to elevated cooling load over the next two weeks. However, expected anomalies softened for the 11-15-day period compared to yesterday’s outlook across most of the eastern two-thirds of the country, perhaps contributing to today’s price declines. The upcoming heat wave is expected to peak over the weekend in the Midcontinent and early next week in the East before more seasonable temperatures return to both regions.

Natural gas demand from the power generation sector has averaged just above 30.5 Bcf per day so far in May, representing an increase of about 1.5 Bcf per day compared to the same period in 2025. The lower price environment in 2026 is leading to higher utilization of gas-fired generation assets across the country, increasing gas consumption on a weather-normalized basis. Demand from this sector looks poised to continue outpacing year-ago levels, which could limit storage growth into the peak summer months.

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Natural gas futures began the electronic session on a strong note, moving higher shortly after the 6:00pm Eastern opening of trading. Weekend runs of near-term weather forecasting models helped to provide support to pricing as it appears a warmer pattern change is around the corner, with much of the country expected to see above normal temperatures for much of the next two weeks. At this point in the season, that translates into daily higher temperatures near or above 90°F across Texas, Florida, and the Plains, while the major population centers of the Midwest and East Coast should see daily highs eclipse 80°F.

These daily temperatures are high enough to create meaningful early season cooling demand, which should lead to higher natural gas burn for power generation and tighten the fundamental balance.

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Futures started the day on a stronger note but began to lose steam shortly after the traditional pit session open at 9:00am Eastern and continued to trend lower throughout the day. From a demand perspective, the market is now focused squarely on potential cooling demand as the 6-10 and 11-15 day temperature outlooks have shifted to an above-normal temperature pattern.

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The most important piece of fundamental data to hit the market today was the weekly natural gas storage report, which showed a 63-Bcf build into storage. While that number was not dramatically out of line from a historical perspective (as measured by the 2021 - 2025 average for the same week), it was materially lower than pre-report estimates. Moreover, from a weather-adjusted perspective, it was the tightest storage build since the week ending April 3, 2026, based on a model using population-weighted temperatures and the 2024 & 2025 weekly storage changes.

Looking ahead, the market will likely be focused on whether this storage miss was a one-off or a harbinger of a more durable shift in the underlying fundamental balance.

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After a long period of cooler weather, widespread warmer-than-normal temperatures are now in the forecast starting in the 11-15-day outlook. This will bring population-weighted heating degree days to minimal levels and drive the first consistent air-conditioning needs of the season, with cooling degree days expected to come in near or slightly above normal levels beginning early next week. Still, forecast anomalies are relatively soft, and there are no major heat waves akin to mid-May 2025 on the horizon.

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In addition to mild temperatures keeping a lid on weather-related demand, this week has seen a downturn in LNG feedgas volumes. Flows had been running consistently above 20 Bcf per day, but recent data shows a dip below 18 Bcf per day, with most of the reduction coming from Corpus Christi, Calcasieu Pass, and Cameron LNG. Combined, these three terminals are showing flows around 2.5 Bcf per day below demonstrated maximums, which appears to be tied to scheduled maintenance. Feedgas across all facilities will likely rebound in the coming days and weeks as maintenance is completed.

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Today saw what could turn out to be the lowest combined population-weighted degree day total of the season, as heating and cooling needs were both minimal. The forecasted 5.1 degree days would be the lowest total since early May 2025, likely signaling the low point before more meaningful cooling needs materialize in the coming weeks.

Cooler-than-normal temperatures are expected to persist throughout the two-week period across most of the eastern two-thirds of the country. While the West is expected to remain much hotter than normal, energy demand will likely remain subdued deep into May barring any major pattern shifts.

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Cooler-than-normal weather continues to dominate near-term forecasts, helping to keep residential and commercial demand elevated. However, these temperature patterns are increasingly limiting air conditioning load and will become more overtly bearish as May progresses. This will continue to blunt the impact of tighter underlying supply driven by flat production and increased exports. If heat begins to develop across key population centers, though, the tighter balance could move to the forefront and become a more meaningful driver of market sentiment.

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Futures began the day trading lower, with the June - November 2026 contracts trading to fresh, multi-month lows around 8:00am Eastern before beginning to trend higher. Today’s natural gas storage report provided additional support to pricing as the EIA reported a 79-Bcf addition into underground storage, which was in line with pre-report estimates but well-below last week’s 103-Bcf injection.

Near-term weather forecasts continue to point to colder-than-normal temperatures across the eastern half of the U.S. in the coming weeks. This colder pattern will have less of an impact on natural gas demand for heating as the calendar progresses and normal temperatures continue to climb into May.

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Temperature forecasts point to an abbreviated period of more significant heating demand in the immediate term, but anomalies are expected to fade beyond the next few days, with weather patterns returning closer to demand-neutral across most key market areas. The cold in the 1–5 day period will lead to elevated residential and commercial demand, but volumes are expected to remain well below levels seen during colder-than-normal periods earlier in April.

Tomorrow’s storage report is expected to show a smaller build than the week prior. Following the historic 103-Bcf injection for the week ended April 17, the report covering the week ended April 24 is expected to show a build near 79 Bcf, according to the The Wall Street Journal survey of analysts. Estimates fell within a relatively tight range, spanning 72 to 84 Bcf. The build is likely to add to the surplus versus the five-year average while coming in below the year-ago injection of 105 Bcf.

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June will roll to the front of the forward curve at a slight premium to the May expiration, but that contract has shown weakness in after-hours trading. With temperature forecasts for the next two weeks showing ongoing soft demand conditions, near-term fundamentals remain bearish. However, cooling season is approaching, and it is only a matter of time before we see substantial air conditioning load emerge. Net natural gas supply remains lower than year-ago levels, and power generation demand is running higher than in 2025. As summer demand ramps up, this tightness could start showing up in weekly injection numbers.

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With ongoing shoulder-season weather and no major heat waves in the near-term forecast, the market continues to drift without any major catalysts. Sagging domestic production and record LNG exports would be more significant issues if weather-related demand were not so low. Residential and commercial demand still has further to fall before reaching summer minimums, while power generation load has yet to pick up substantially. For now, the market appears content to mark time until either summer cooling demand emerges or tighter supply trends begin to show up more clearly in the storage data.

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The substantial two-day decline comes following an week-plus period of very low volatility and marginal daily gains. With heating demand now moving fully out of the picture, and mild weather on tap for at least the next two weeks, it appears again that the near-term path of least resistance is pointing to the downside.

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Today’s storage report weighed on the market. The 103-Bcf build was the largest on record for this early in the season and reflected a week of very low weather-related demand. Consumption across all domestic sectors was near seasonal minimums during the report week, offsetting any impact from weaker net supply.

Domestic production has been depressed compared to recent highs due to seasonal maintenance as LNG export facilities have continued to operate near capacity. This dynamic has so far been masked by historically mild April temperature patterns, but if net supply continues to run south of year-ago levels deeper into the summer, it will start to have a material impact on the pace of storage growth.

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Cooler temperature forecasts for the remainder of April are conducive to lingering modest heating needs in northern market areas, but overall energy demand remains tepid. If widespread cool anomalies extend into mid-May, they will become overtly bearish by limiting early cooling demand across virtually the entire country.

Tomorrow’s storage report is expected to show by far the largest injection of the season. The market is anticipating a build of 94 Bcf, according to the consensus of the The Wall Street Journal survey of analysts. Responses came in a relatively wide range, spanning from a 62-Bcf build on the low end to the most aggressive estimate calling for an injection of 115 Bcf. The consensus build would further widen the surplus to the five-year average and year-ago inventories.

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Even though daily gains have been muted and price action has been calm, the market has moved steadily higher over the past week. Today marked the fifth consecutive increase for the prompt-month contract, which has added about $0.10 per MMBtu over that stretch. Overall, it appears the market is still looking for direction against a backdrop of mostly bearish near-term fundamentals and tightening underlying supply.

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Residential and commercial demand picked up over the weekend, coming in about double recent lows, but consumption from these sectors has already started to fade as temperature patterns normalize. Forecasts for the next two weeks call for a cooler-than-normal bias across most of the country, with anomalies more conducive to limiting early cooling needs than driving lingering heating load.

Contracts across the curve remain materially lower than month-ago levels, but price action over the past week indicates that downside momentum is running out. For now, the market appears to be in a holding pattern, waiting for more clarity on summer weather expectations and to see whether more substantial production growth begins to emerge.

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Futures pricing edged higher through 2027 and was virtually unchanged for 2028 delivery. As the prompt-month contract ended the week marginally higher, the Winter 2026-27 strip finished down $0.05 per MMBtu, trading below $4.00 per MMBtu for the first time since before the January cold snap. With mild weather on tap, and assuming no major catalyst alters market sentiment, we would expect low-volatility trade to continue into next week.

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Today’s gains came despite a relatively strong storage build. The 59-Bcf injection announced for the first full week of April came in stronger than historical benchmarks, widening the surplus to last year and the five-year average. The lack of any meaningful continued downside momentum in recent days could suggest that bearish sentiment is running out, even as temperature patterns are forecast to remain mild for the next two weeks.

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Tomorrow’s EIA storage report is expected to show a similar build to the previous week. The Wall Street Journal survey of analysts showed a consensus view for a 51-Bcf build, with responses ranging from 33- to 69-Bcf additions. The consensus build would increase the surplus to the five-year average from 87 to 100 Bcf.

Storage injections are likely to ramp up further starting with next week’s report, which covers the week ending Friday, April 17. Inventories are likely to grow at a healthy rate through at least the end of April due to tepid weather-related demand across most of the country.

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