June natural gas prices declined a bit over a percent on the day, though we noted prices diverging from weather as weather forecasts over the weekend actually trended hotter in the medium-term.
The result is that once again GWDDs above average are expected through the next 15 days.
Instead, we saw continued looser balances today keep cash prices limited and pressure the front of the strip lower. This is something we had highlighted as a risk to clients last week, as our new weather-adjusted power burn model pointed to loosening burns last Thursday and our natural gas sentiment temporarily turned "slightly bearish."
Sure enough, the June contract was the weakest today despite weekend GWDD additions.
Yet coming in May, decent weather changes over the weekend can only have a marginal impact at best, and we saw today's trading range remain quite small compared to past late-May ranges.
We should again see volatility increasing ahead of Thrusday's EIA print, with the last two prints bringing significant rounds of buying. Already Dominition Transmission (DTI) announced a decently smaller injection than last week, fitting with our projection that this week's injection will be decently smaller than the last.
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