Tuesday, June 11, 2019 at 5:28PM
While natural gas prices remain at very low levels historically, we have now put together nearly a 10 cent rally off the multi-year lows set late last week. The July contract closed the day up just over 4 cents, closing a tick under the $2.40 level. Changes in supply / demand balance data along with firmer cash prices certainly helped the market set at least a temporary bottom, but weather changes have grown increasingly bullish as well compared to what we saw at the conclusion of last week. This was a risk we alerted clients to back in our Friday afternoon "Pre-Close Update". It took a couple of days, but those warmer risks have become much more apparent. Take, for example the 7-11 day surface temperature anomaly forecast from the GEFS back on Sunday: The current forecast, valid the same period, has shifted decidedly warmer: The changes continued beyond this period as well, as can be seen by comparing Sunday's 11-15 day GEFS forecast to the latest run, valid the same dates. Here is Sunday's run: Now, the latest run: The warmer shift in both periods has boosted weather demand forecasts, contributing to this week's natural gas rally. Have the weather models completed their warmer adjustments, or is this a trend that continue to grow? Our products can help keep you one step ahead of these potential market-moving changes. Sign up for a 10-day free trial here to take a closer look at what we have to offer.