The July natural gas contract broke above resistance at $3 today, settling up a couple percent on the day following the bullish reversal off EIA data yesterday.

After initially being solely prompt led, the rest of the summer strip caught quite a bid through the day as well, with both the July and August contracts settling up the same amount.

For the first time in awhile the winter strip did not participate quite as much in the rally, with decent narrowing in V/F.

This rally came following overnight long-range heat additions, as seen in our Morning Update. Though forecasts cooled slightly in the shorter-term, worries about heat late in the month being more sustained clearly helped the front of the strip rally.

Yesterday in our Afternoon Update we had been indicating we were looking for both the shorter-term cool trends and the longer-term hot trends to arrive, and if enough overnight hot trends could arrive prices may press towards $3.05.

Our Morning Update demonstrated those hotter trends, and prices from there broke higher. This comes amid storage concerns as well, as storage levels still remain over 500 bcf below the 5-year average. These low storage levels have allowed the H9/J9 March/April spread to continue grinding higher in this recent rally.

Recently we published our Pre-Close Update, which broke down movement along the natural gas strip today and indicated how we see both weather and price risk skewed heading into the weekend. In it we showed how even Climate Prediction Center forecasts have picked up on the medium-term cool risks and long-term heat risks we had been expecting.

Over the weekend we will be closely watching the latest trends in long-range weather model guidance for indications of how intense any heat will be and how long it will last. We will also be looking for any impact on weather-adjusted balances from this recent break higher in prices, alerting clients on Monday how we see weather-adjusted balances, current weather forecasts, strip movement, and expected weather forecast changes working in tandem to impact forward price risk and action.