After two big down days in a row, natural gas prices were able to find some support today, with the June contract settling up around 4 cents on the day. 

(Click on image to enlarge)

In our afternoon report yesterday, we highlighted the fact that the selling seemed overdone and moved our sentiment to "slightly bullish", feeling that a rebound could occur in today's session. 

(Click on image to enlarge)

This worked out quite well, with the June contract coming within a penny of touching the 2.60 level once again. Part of our reasoning was also our expectation for the injection in today's EIA report to be on the low end of the range of most market estimates (generally ranging from 100-108 bcf). Our call was for a 100 bcf build, which wound up dead-on with the report. 

(Click on image to enlarge)

This number was similar to last week's 106 bcf build in terms of implied supply/demand balances. 

(Click on image to enlarge)

In terms of what is next, we have some strong heat to wade through over the next week, and the market will want to see how the supply/demand balances look during this hotter spell, which is going to deliver numerous record highs in the Southeast over the next several days. Many areas will top out near or above the 100 degree mark on the hottest days. Here are Tuesday's forecast highs, for example: 

We do still see the level of heat backing down somewhat after next week, with total GWDDs falling back closer to normal levels into early June. 

(Click on image to enlarge)