$2.72 August Natural Gas Holds For Now
It was yet another slow pre-EIA day in the natural gas land, with the prompt month August natural gas contract trading within a very narrow 3.4-cent range. In the end, the contract logged a decline of around a percent and a half as cooler weather risks later in July combined with weak cash prices to keep pressure on the front of the strip.
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We noted in our Morning Update that GWDD forecasts were a touch lower again today, likely pushing prices into support.
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Yet as we predicted for clients in our Note of the Day, at least in the short-term that $2.72 level we have been watching so closely was able to hold.
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It held even without significant strength along the strip, as V/F only widened a touch on the day.
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A slightly larger move was seen in the Q/V August/October spread, however.
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This came as those cooler risks we broke down both yesterday and again this morning in our Morning Update were reflected once again in the afternoon update from the Climate Prediction Center.
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Now all attention turns to tomorrow's EIA print, which should add clarity as to just how much holiday influence was in last week's print. Already we saw a large injection from Dominion Transmission this past week that should allow for at least a sizable injection to be reported across the East.
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As always, we will be covering all aspects of tomorrow's EIA print for clients, and breaking down price risk based off of our updated view on balance and latest forward weather expectations. We've had an especially strong reading of natural gas balance the last couple of months.
Disclaimer: To begin receiving both our technical and fundamental analysis of the natural gas market on a daily basis, and view our various models breaking down weather by natural gas demand ...
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