After one of the hottest Junes in the historical record, the month of July has, so far, been a dud in most locations that matter to the natural gas market.

Over the last few days, cooler changes to the forecast have continued, as models have been guilty of overplaying the return of any heat into the key areas of the Midwest and East in the medium range. This has driven our projected July Gas-Weighted Degree Day (GWDD) total well under the recent 5 and 10-year average, marking what would be the coolest (if one wishes to use such a term in summer) July since 2015.

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Now, it is true that the 5 and 10-year average is setting the bar high, as we have had numerous hot summers in the last 10 to 15 years, but, given that analysis in the natural gas market typically involves using the 5 or 10-year average as a baseline, it is a very relevant measuring stick to use.

The upcoming pattern, while not yet hot in places that matter most, is definitely not as cool as the opening of the month has been.

In terms of GWDDs, here is the projection from the GEFS and ECMWF EPS:

We would toss the GEFS here, which is notably hotter than its ECMWF counterpart but has been biased way too hot in recent weeks, even when the pattern has verified hotter. Still, this means the upcoming 15-day period is closer to the 5-year average than we have been, so it does represent a hotter step change. Ideally, however, we would like to see more 90s into the Midwest and East in order to get the weather component more solidly into the "bullish" bucket again, something that, for now, is lacking in the forecast, at least until late month.

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