First Take: Potential shortfall in US weekly storage additions BULLISH for July Henry Hub Luke Larsen *July Henry Hub futures have rebounded almost 10% from recent lows *Concerns about summer heat amplifying fundamental fears as North America approaches peak power months *EIA weekly gas storage report could show injection rates down over 20 Bcf for week ended May 23 A self-fulfilling, BULLISH prophecy appears to be taking shape in the US natural gas market as the July Henry Hub contract prepares to assume the prompt position late in the afternoon of May 28. The current June contract has faced compromised liquidity during expiration week, a situation exacerbated by the Memorial Day market closure, allowing an earlier shift in focus toward the July contract. Two consecutive sessions featured early lower consolidations, with July Henry Hub testing down to support levels amid June weakness before being upended by strong rallies off those lows, pushing July futures to just shy of $3.75/MMBtu following the holiday weekend. At the start of last week prices had retreated to a one-month low below $3.45/MMBtu before gaining 9% to to close at $3.767/MMBtu on May 20. July 2024 set the record for monthly Lower 48 power generation demand at nearly 50 Bcf/d. Long-range forecasts predicting more of the same this summer are re-establishing the bullish trend that was briefly lost during the mild (even chilly) month of May. July prices have now moved above their key support level of $3.61/MMBtu (the 200-day moving average), and are approaching $3.75/MMBtu. This positions Henry Hub to make a run toward $4/MMBtu, where resistance will emerge as traders take profits or bet against further price increases, especially since both the 100-day moving average and year-to-date average sit just below $4/MMBtu. The potential price rally could be further supported by the May 29 release of storage data for the week ended May 23, which may reflect a injection shortfall relative to the five-year average for only the second time since mid-March – when the July contract achieved its high point of $5.23/MMBtu on March 10. Read on PlattsConnect: https://tinyurl.com/4w9bzb46