Natural gas futures have steadily climbed almost 17% since February, largely due to a frigid, inventory-draining winter that extended into April, enveloping the entire northern hemisphere and leading to record consumption and storage withdrawals. Earlier this month, Wood-Mackenzie issued a report that flagged slowing supply growth as well as a moderate rebalancing of the global market.

Although the winter has passed, extreme temperatures and below-average stocks may be a problem that is here to stay as heaters shut down and A/C units switch on. The amount of energy required to cool US buildings in June is on track for its second highest level since 1981. Meanwhile, the amount of natural gas in storage started June at the lowest level since 2014 for that time of year, and the second lowest level in a decade. Further, EIA end-of-storage index futures indicate bets that October will end with about 3.525 trillion cubic feet of natural gas, which would be the lowest for that time since 2008, in spite of the highest levels of US natural gas production ever . . .

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