The July natural gas contract settled down a bit more than 2% on the week as weekly EIA data came in right at our expectation, weather forecasts gradually cooled and balance data continued to appear relatively loose. 

(Click on image to enlarge)

This fit in well with our weekly sentiment, released on Monday as part of our Weekly Natural Gas Update. 

(Click on image to enlarge)

Weakness through the week was most pronounced at the front of the strip, making it clear that weather played a prominent role in the price decline. 

The result was clear widening in the October/January V/F spread. 

(Click on image to enlarge)

Yet the front of the strip was all hit equally, and the weakest contract on the week was actually the August contract, not the prompt month July. The result was rather significant narrowing in the July/August N/Q spread. 

(Click on image to enlarge)

This would seem to indicate that some of the price decline was related to other short-term fundamentals such as loosening power burns, something we wrote about quite a bit to subscribers this week with our new weather-adjusted power burn model. We combined this reading of burns to correctly expect yesterday's explosion-induced rally to reverse, but also read recent production declines as firming up support despite these loosening burns, correctly forecasting this morning's price action in our Morning Update. 

(Click on image to enlarge)

For those interested, we have released a full version of our Morning Update 

 to look through. Sure enough, that $2.87 support level did hold today, and we actually saw afternoon model guidance tick back a bit warmer to help firm it up (below GEFS images courtesy of the Penn State E-Wall).