The June natural gas contract went off the board by selling off over 2% on the day, though some hotter afternoon guidance helped prices settle off the lows into the end of the day. 

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Selling was heavy along the whole strip today, with winter contracts only adding a small bit of support into the settle. 

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This fits well with our expectations from last week, without Friday Note of the Day breaking down why our supply/demand model showed balances as short-term loose and how prices could quickly sell off on any cooler trends. 

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Our Pre-Close Update explained why last Friday our sentiment turned slightly bearish as well, as July contract prices entered into the $2.87-$2.9 range we had been watching for off any average long-range GWDD forecasts. 

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Prices did catch a bid later in the day, thanks in part to warmer output from the afternoon 12z GFS ensemble weather model (model image courtesy of the Penn State E-Wall). 

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Our Morning Update called for very impressive GWDDs in the short and medium-term that will gradually trend back towards average, but we could see a couple days with the highest GWDDs since 1981 for that date should forecasts verify. 

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A lot of this was priced in last week when we saw natural gas prices rally rather significantly. However, this heat is also coming after a week last week where cooling demand was not quite as impressive. Though cooling demand was slightly above average, heating demand was more below average with widespread mild temperatures keeping GWDDs right around seasonal averages. 

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Already we have seen early data from Dominion Transmission (DTI) indicate a larger draw than last week and a year ago, setting up at least the East Region to report a larger draw on Thursday than we saw last week. 

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Today we released our Weekly Natural Gas Update for subscribers, looking at all aspects of the natural gas market including how weather models are likely to trend and how that could impact natural gas prices, as well as what current balances look like and what spreads are signaling about forward price risk.