It was quite the "down" day for natural gas prices today, with the front-month July contract falling nearly 3% on the day. 

(Click on image to enlarge)

While there had been some selling in the wake of the expiration of the June contract, which we expected to see, it was the EIA report that really sent the market into a tailspin, reporting a very large injection of 114 bcf last week. 

(Click on image to enlarge)

Most market estimates, including our own, were expecting a build in the 100-104 bcf range, so this was quite the miss, with the Midwest region appearing to be the source of the largest errors. It was an above normal demand week, with heat in the Southeast, and unseasonable chill in the West and North, with the Midwest in the "battle zone". 

(Click on image to enlarge)

That zone between the warm and cold anomalies was the focal point for higher wind, which may have been partially responsible for the miss, taking away from gas burns in that part of the country. Either way, it reflected that supply/demand balances last week were obscenely loose, the loosest we have seen over the entirety of the last ten weeks. 

(Click on image to enlarge)

From here, we are looking at a pattern that features more tame demand levels, as the West warms into the 6-15 day period especially, while the heat waves in the eastern U.S. 

(Click on image to enlarge)