Fundamentals Haven’t Changed for the Bulls
I keep coming back to production when I look at why this rally feels thin. Output is near record highs and the EIA just raised its production forecast on top of that. Demand is running below last year. The latest storage report showed a build of 59 Bcf, well above the five-year average. Inventories are higher than both last year and the seasonal norm. There is no supply story that favors the bulls right now.
The one supportive factor worth watching is on the global side. Damage to a major LNG export facility in Qatar and Middle East supply disruptions could tighten global supply over time and boost U.S. exports. That’s a longer-term argument. It’s not moving the market today.
Near-Term Bias Stays Weak
Prices may continue to grind higher on short covering but strong production and elevated storage are likely to cap gains. Unless demand improves in a meaningful way this rally is borrowed time.
