The June natural gas contract continued lower today after its reversal yesterday, settling down a bit less than a percent on the day. 

Prices yesterday initially moved into our $2.85-$2.87 resistance level before reversing lower and moving back into support. Thus far price action this week has played our exactly as we had spelled out in our Weekly Natural Gas Report from Monday. 

Today it appeared that slightly cooler forecasts through May played a role in the price move, as we noticed the June/July M/N natural gas spread widen significantly on the day following recent narrowing. 

Despite forecasts for a warm May, we saw enough heating demand loss in the medium-term and cool risks across the South and Southeast in the long-term for our Morning GWDD Forecast to only hold GWDDs right around seasonal averages. 

This has come as some weather models have eased off the intensity of heat they show into the end of May, something we explained was a bearish risk back on Monday in that Weekly Update. 

Even cash prices took a small dip today as expectations for forward cooling demand are not quite as impressive as what we saw over the past weekend. 

Certainly, the weather is not the only factor driving natural gas price action, but thus far this week it seems to have played a role. Meanwhile, we are monitoring production decreases from pipeline maintenance and today issued a Note on weather-adjusted power burns and forward weather expectations explaining where we expect balance to trend moving forward. Tomorrow's EIA print will certainly play a large role, though, as we will send out our EIA Rapid Release immediately following the print showing how tight/loose it is on a weather-adjusted basis and how it appears likely to drive price action into the end of the week.