The June natural gas contract continued its move lower, selling off on cash weakness this morning before recovering some of its losses this afternoon to settle about a third of a percent below Friday's close. 

Losses were most significant along the fall strip, with the June contract helping pull the winter strip higher into the settle. 

The result was another tick higher in the June/July M/N contract spread even as the entire strip declined somewhat on the day. 

Selling early today appeared related to far weaker physical cash prices at Henry Hub. These had helped prop prices up last week and today helped pull them lower. 

In our Pre-Close Update on Friday we indicated that on a technical basis we saw room for a dip to $2.7-$2.72 early this week but that lower support could hold with a more supportive strip, which is exactly what played out today. 

Our Morning Update also called for a move towards $2.7-$2.72 while prices were still flat, though prices admittedly only got to $2.728 before reversing in the afternoon. In our Afternoon Update our Gas Weighted Degree Day (GWDDs) forecast ticked up slightly on afternoon guidance as slightly more cooling demand was shown long-range, though afternoon Climate Prediction Center forecasts for the long-range actually decreased the odds for above average temperatures in the 8-14 Day time period across the middle of the country. 

Weather swings are certainly not as significant for natural gas demand this time of year, but they can still make incremental demand impacts that matter all the more given where current storage levels are. 

In our Afternoon Update we dove further into the future forecast and analyzed recent spread action in the context of fundamental changes over the past weekend. Weather forecasts remain relatively volatile and we continue to see them playing an incremental role in pushing prices along with balance expectations, and of course this Thursday's EIA print will be very important following three tighter-than-expected prints.