Summer to begin with above normal A/C demand

From MXenergy's pricing and risk teams:

The driver of natural gas prices for this time of the year is clearly warm weather. While normal temperature forecasts drive prices down, tropical storms drive them up. The Midwest and NE have been showing persistent above average temperatures that have helped to support the recent rally. This volatility will continue throughout the season and will set the tone for winter prices. The fact that we've been injecting gas in greater quantities than usual is a significant bearish signal but don't be fooled, a period of cold winter weather for any length of time could wipe out any excess we have in storage. On the other hand a bearish factor in this market is the fact that LNG imports continue at surprisingly high levels, which could offset additional demand caused by hot weather and the need to burn more gas in gas-fired power plants.

Back to the summer overview, NOAA continues to forecast a pretty active hurricane season. We have seen tropical storms create quite a commotion in the market, with the first named storm on the first day of the hurricane season. Prices are being supporting by buyers and speculators reacting to the threat of hurricanes and the prospect of hot weather later this year. Demand for air conditioning is forecasted to be as much as 28% above normal in the Northeast through mid June.

The National Weather Service last month predicted that most of the US will experience warmer-than-average weather from June to August.

So once again we have a highly uncertain outlook, probable price spikes and ever present volatility. Hold on to your seats - a roller coaster ride is in the offing.