Natural Gas Prices End The Week Virtually Unchanged From Last Friday

If you took this week off and are just now checking in, you'd think absolutely nothing had happened, as natural gas prices ended this week almost exactly the same as last week, with the September contract down just 2 ticks on the week. 

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Of course, the week had its usual moves along the way, plunging to a new prompt month multi-year low of 2.029 Monday morning before recovering. There were a few more attempts to dip under the 2.10 level throughout the week, including this morning, but none of them held. The reason? Bullish and bearish factors continue to battle for control in determining the next move. We highlighted yesterday how the reported build in yesterday's EIA report was less than expected, but hardly bullish when comparing the same week in previous years. 

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The LNG decline remains a bearish force as well, one which the market may be stuck with for another couple of weeks yet. 

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With less natural being taken into LNG plants, the next couple of EIA reports will show inflated builds relative to what they otherwise would. 

We also had new production highs this week. 

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On the bullish side, we have the weather pattern, which remains in its hot-biased mode, with above-normal demand overall for the foreseeable future. 

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This has been the mode of the pattern ever since the demise of the El Niño base state back in late June. 

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One key change occurred this week, however. Notice the lack of heat in Texas on the above map, as the strongest heat since the pattern turned hotter has been in the eastern U.S. Texas is now seeing its hottest weather of the summer, with 100 or better in the major cities of Dallas, Houston, and San Antonio. This stronger heat is forecast to continue at least for another week or so, as seen on our official forecast maps. 

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Because Texas is a very important state when it comes to natural gas usage, stronger heat there can lead to higher natural gas burns, which we have seen confirmed in this week's data.