Natural gas prices are ending the week with a very strong rally, as the August contract currently is up a whopping 13 cents on the day.
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What is causing such a rally in prices? The answer is a notable hotter shift in the weather pattern, as seen in our early morning GWDD outlook/changes.
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Looking at the maps, while the most persistent heat lies out west in the 6-15 day period, there is a lack of cooler anomalies anywhere, which is keeping national demand elevated.
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Zooming in on the chart at the bottom right of that image shows that the projected GWDD total for this July is getting close to the levels seen in July 2018, which was one of the hottest / highest demand Julys on record.
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While this definitely represents a hotter July than the market was prepared for last week, or even to start this week, the magnitude of the rally was exaggerated due to the large short position that had built up in the market in recent weeks.
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