Please visit the Direct Energy Business online customer education center, known as Energy Insights, to view my Weekly Energy Market Update video for April 29, 2013. Receive weekly updates that are sent right to your email inbox: click here to subscribe.

The following is a summary of last week’s market activity and the market outlook:

• Natural gas prices finally had a ‘down’ week last week, as weather is moderating and the natural gas storage report was near expectations. Prices fell for all terms, with near-term prices seeing the most decline. Intra-day prices on Friday were as low as $4.06 before returning to normal levels by the end of the day and again this morning.
• June, which is now the Prompt Month, closed at $4.20, down 23 cents for the week. The 12-Month Strip fell by 21 cents and Calendars ’14 and ’15 fell by 9 cents, leaving all three at $4.31, while Calendar ’16 is at $4.34. The curve remains exceptionally flat through Calendar 2016.
• The growing natural gas storage deficit continues to increase summer refill demand and is a key factor for near-term price support. Last week the EIA reported 30 Bcf injection, which was near expectations but smaller than historicals. Current inventory through April 19 is 1,734 Bcf, which is 807 Bcf(31.8%) below last year and 94 Bcf (5.1%) below the 5-year average.
• After weather, natural gas production is the market fundamental being most watched, as a jump in production/drilling due to higher prices would be a signal that a downward price correction is in order.
• Last week’s downward move seemed to put the market in a more “logical” place — well above February levels (near $3.00), but not as high as $4.50. The recent upward price direction made sense but the extent of the rally seemed overdone and thereby last week’s correction made sense. The market resilience on Friday afternoon is a sign that the market will not give up gains easily.