Friday, June 28, 2019 at 4:13PM
It was a roller-coaster ride for natural gas prices to end the week, with the August contract up as much as 4 cents on the day at one point before sellers stepped in, sending it to a daily decline of 1.6 cents, forming a shooting-star candle for the day. Despite today's close, prompt month prices did rise just over 5.5% for the week, thanks in part to a notably hotter weather shift in forecasts for the early part of July. The current 6-10 day period from the latest GEFS model looks like this: Contrast that with what the model showed 6 days ago for the same period: Notice the large hotter shift, especially in the Southeast, one critical region for natural gas demand. Those hotter trends had come to a halt in the last couple of model cycles, with our net GWDD (weather demand) change slightly lower this morning. This brings us back to today's price action. Given the weather forecast and our interpretation of supply / demand balances, our view sent to clients in this morning's report was neutral, feeling that it would be difficult to sustain any further price rally. While prices did rally on some strong initial Henry Hub cash prices, the rally indeed did prove to be unsustainable, reversing rather quickly after mid-morning. Next week is a new week, and in this case, a new month as well. Our research in the world of weather and natural gas fundamentals can help you stay ahead of market-moving changes. Sign up for a 10-day free trial here and see all of the products we have available to add value to your operation.