The September natural gas contract settled up around a percent on the day as strong cash prices got prices moving higher this morning.
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After dipping late last week and remaining flat yesterday, Henry Hub cash prices rose solidly today.
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In our Morning Update, we outlined that stronger cash prices today combined with a strong strip would pull the September contract up from the $2.93 level it was trading at into $2.95-$2.96, and that $2.98-$3 was possible but unlikely. Sure enough, prices spiked this morning but peaked at $2.974.
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In that same update, we outlined that afternoon model guidance was likely to trend cooler again today.
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Both European and American guidance trended cooler this afternoon in the medium-range, fitting our expectations perfectly and pulling the front of the natural gas strip back.
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The result was a further decline in the U/V September/October contract spread.
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Medium-range Climate Prediction Center forecasts cooled further as well to meet our expectations.
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