The weather broke natural gas prices higher today, with the June natural gas contract shooting 3.5% higher on the day after prices settled near our support level again yesterday.
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In typical weather-driven fashion, the largest gain was at the front of the strip, with the rest of the strip gradually lagging behind the further out you go.
As seen in our Morning Update, overnight models added a significant number of Gas Weighted Degree Days (GWDDs), almost entirely in the form of cooling demand from increased heat.
This heat was seen as intense enough that in our Morning Text Message Alert we highlighted that $2.87 was likely to be tested today.
Then our intraday Note of the Day looked at how a supportive natural gas strip put the $2.9-$2.92 range in play following the break of $2.87 resistance. The June natural gas contract eventually hit a high of $2.917 on the day.
Today's weather-driven rally comes following a significant widening of the M/N June/July natural gas spread, which set the table for a sizable rally on GWDD additions.
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As seen in our Afternoon Update, the Climate Prediction Center picked up on these further hot risks today too in their 8-14 Day forecast.
This fits with some of our past forecasts, as we had been targeting June to have a rather significantly hot bias for over a month (as seen in our Seasonal Trader Report from April 16th).
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