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Recession Fears and Pipeline Growth Weigh on Bullish Outlook Amid Hot Summer Forecasts
Bullish market fundamentals continue to be held at bay by threats of a potential domestic and global recession. Initial summer forecasts are calling for a potentially top 10 hottest summer on record, adding to bullish factors that could drive markets once there is more clarity surrounding tariffs.
Markets rebounded from oversold, leading to a 15% decrease in pricing. From a fundamental standpoint, additional pipeline development and increased oil pricing have added some additional bearish factors into the market. Unlike in the past, oil pricing and natural gas pricing are not trading in tandem, lower oil pricing could potentially lead to decreased drilling activity in the Permian where natural gas is by product of oil drilling. Permian natural gas production is set to see the largest increase in the U.S. for 2026.
Bearish
- The market is influenced by a general sense of economic pessimism.
- Recent reports show strong injections into storage.
- Ongoing pipeline development is contributing to the bearish outlook.
Bullish
- Summer Weather Forecasts are being closely watched by the market.
- Gas demand for power generation is up by 2 BCF compared to the same time last year.
- LNG exports are up by 3 BCF versus last year.
Storage Report: 5/22/25: Higher-than-Expected Injections Amid Warm Weather
Expected Injection – 116 BCF
Actual Injection – 120 BCF
Current Storage Level – 2,375 BCF – 3.9% below the 5-year average
Storage has recovered above the 5-year average due to favorable temperatures throughout the past two months. Levels remain 333 BCF lower than last year at this time – there is still work to be done to prepare for next winter.
NOAA MAP: Heat Builds in the West and Northeast, Cooler Pattern Holds in the Central U.S.
Regional Dot Plots
Rolling Gas Curve
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