After a notable drop yesterday, natural gas prices recovered today, with the June contract posting a gain of nearly 4 cents on the day.
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A rally was far from a sure thing early on, however, as prices initially dropped early this morning, and that was followed by relatively weak cash prices again today.
Next up was the EIA report, which our BWS forecast nailed this week with our estimate for a build of 106 bcf.
While much larger than last week's build, it did confirm a tighter supply/demand balance than the last several weeks.
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This combined with some in the market having called for a build of around 110 bcf likely helped prices move back up. While it was tighter, it was still loose when looking at the same week in previous years.
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As can plainly be seen, additional tightening of balances is needed to convert the overall picture to a "bullish" one.
The weather pattern is certainly doing its part to try and help out, with an abundance of late-May heat on the way in the eastern half of the nation.
Current 6-10 day GEFS forecast:
Current 11-15 day GEFS forecast:
Record heat may be seen late next week in the Southeast, with some locations flirting with 100 degrees for a high, quite extraordinary for late May.
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