If in May and June we use up 300bcf of the storage differential with last year then I really think that the market will presume that in July, August and September we will use up another 500bcf. As has been pointed out to me many times, the current futures strip offers zero incentive to put gas into storage, though reality certainly shows that it is going in, because the gas has to go somewhere. Either the winter futures have to go up to justify putting the gas in storage, or the front month prices have to go down. The majority of summer and fall production has not already been bought. Will the market may take a free hand and move something price wise? Or, conversely, will a change in perception of supply or demand move the market?
The next 4 reports are almost certain to bring us from 737bcf below last years storage to about 580bcf below last years number when the report on June 6th comes out (and about 30bcf below the 5 year average). At that time, if everything else is the same as now (production, demand etc) it is a no-brainer to presume that we will have used up the differential with last year by the end of September or so. However, that would be missing the fact that, despite the price differential, in summer we always use a lot more NG for power generation because of the nature of NG power plants as compared to coal ones, not based solely on price. Heat demand is definitely a major factor, but so is the variability of the heat from projections. Now, I am not saying that all other factors will stay the same, but, they seem likely to be close enough at the beginning of June to convince people.
I can't help but expect summer demand will be either a surprise, or if not a surprise, it will be attributed to lower price if prices drop enough through mid June. The next surprise will be if we end the summer near the 5 year average instead of last years level, simply because of the summer heating demand. What I don't know, and keep spinning my mental wheels on is where supply will be at the end of the Summer. So I am not as confident as to where things will go come fall and where summer weather, power demand, industrial demand, and most importantly supply takes us. I still expect compared to what Mr Market is thinking on June 15th, Mr Market will have have seriously changed his tune again by September 15th.