• Natural Gas finds support after Tuesday’s decline as higher-than-expected air-conditioning demand puts a floor under prices.
• Concerns regarding Norwegian supply after data showed a slump in May and news of earlier-than-expected outages further supports. 
• Possible bear flag on the four-hour chart bodes ill for prices and could tempt bears back into the fray. 

Natural Gas price consolidates on Wednesday after the sharp decline witnessed in previous sessions. Hotter-than-expected weather is one factor preventing deeper declines, with forecasts of temperatures in Texas reaching 100 degrees Fahrenheit this week, expected to put pressure on Gas supplies used in air conditioning, according to a report by Natural Gas World.  

XNG/USD is trading at $2.570 MMBtu, at the time of writing, as we enter the US session on Wednesday.  

Natural Gas news and market movers 

• Demand for air conditioning is expected to be robust due to hotter-than-expected weather in the Western hemisphere as the summer season gets underway.
• If this week’s unexpectedly warm weather is a precursor of more to come, then demand for Natural Gas for air conditioning could start to outstrip demand, according to Natural Gas World (NGW). 
• NGW forecasts Cooling Degree Days (CDD), a standard metric used in the industry, to average 332 Fahrenheit days this summer (June - August), on a par with the three-year average. 
• Yet if temperatures surprise to the upside as it looks possible, it will soon put pressure on the grid and raise prices, says NGW.
• “Weather is unpredictable and our forecasts are conservative as a result, so if temperatures are warmer than the three-year average, gas for power demand averages will be higher than expected.” NGW reports. 
• Natural Gas prices as per the Netherlands-based Transfer Title Facility (TTF) recovered over 10% overnight on continued Norwegian supply concerns. 
• The TTF rose to $11.92 per million British thermal units (MMBtu) on 20 June after sinking to $10 MMBtu the day before from a high of over $14, according to NGW. 
• Gas prices rose on Tuesday after production data from the Norwegian Petroleum Directorate (NPD) in May, came out 7.3% below forecasts.
• Norway produced 274 Mega Standard Cubic Meters (MSm³) of Gas in May, 21.9 MSm³ less than forecast and less than the 339.8 produced in April and the 324.1 MSm³ in May 2022.
• This further exacerbates Norwegian supply concerns after the news of longer-than-expected outages at Norwegian Gas plants. 
• The European market has also been impacted by rumors of an earlier-than-expected closure of the Groningen Gas field in the Netherlands. 
• Norwegian supply is now critical to the European continent after it replaced Russia as the main supplier in 2022, when Norwegian Gas accounted for 23% of imports compared to Russia’s 15%, according to a report by CNN. 
• “The European gas market — and by extension the global gas market — [is] certainly not out of the woods in terms of adequately matching supply with demand,” Tom Marzec-Manser, head of Gas analytics at ICIS, told CNN.
• That said the position is not as precarious as in previous years: European storage facilities are now 73% full — a much higher level than the 56% averaged at the same time of the year over the past five years, according to data from Gas Infrastructure Europe (reported by CNN).
• In addition, news of a deal between Romanian Gas operator RomGaz and Southeast European Gas producer Petrom OMV to build a new platform in the Black Sea is likely to ease regional demand concerns, according to Offshore Energy. 
• The Neptun Deep offshore Gas field will make Romania the largest Gas producer in the EU, and a net exporter.  
• “To give an example of the project’s size: the estimated natural gas production is equivalent to ~30 times the current annual demand of ~4,300,000 households. It is also a major step forward for our Strategy 2030 that aims at supporting the energy transition in Romania and in the region.” Said Christina Verchere, CEO of OMV Petrom. 
• Asian rivalry for Europe’s limited supply is likely to be less than in previous years after Japan and South Korea recorded much higher stores and the Chinese economy continues to falter. 
• The ongoing Atlantic hurricane season in the US could further increase demand in the US