Looking out to the rest of 2024, it also appears La Nina will make its return sometime around July to September. Should this indeed be the case, it is likely a bullish outcome for natural gas prices given it would potentially bring a warmer than usual summer (and thus higher demand for natural gas due to higher electricity consumption).

La Nina could also bring with it increased hurricane activity in the Gulf of Mexico, which has the potential to disrupt both production and transport of natural gas. This could be both bullish or bearish depending on whether any disruptions are that of domestic transport/production versus LNG exports internationally.

But, until then, the weather outlook remains bearish to neutral.

Final thoughts

While the overall outlook for natural gas prices in the near term in no longer as bearish as it has been in recent months, the picture is not yet bullish either. How far (if at all) prices can rally over the next three six months depends much on whether La Nina can emerge in time for the northern hemisphere summer and the bullish weather follow suit, in addition to the extent of any production response of producers to potentially higher prices. Should these two factors tilt bullishly while LNG export capacity continues to grow, natural gas prices could well finish 2024 much higher than where they are now, but there is much to get through from now until then.

In the meantime, it’s also worth noting we are through the negative seasonality from a price perspective, with the next three months or so generally bullish for natural gas prices.