Mother nature continues to crank up the heat, with above-normal temperatures common in the forecast for a large portion of the nation.

Given that we are looking persistently hotter than normal during the hottest month of the year, climo wise, that leads to some very lofty totals in the Gas-Weighted Degree Day (GWDD) forecasts.

It is not common to see two consecutive weeks top the 100 GWDD mark, so, if this holds, it would be very impressive. In fact, with the hotter forecast this week, we now project that this July will be the hottest July on record, based on total GWDDs, beating out 2011 for the top spot. This, of course, would make this month the hottest month of all-time, any month, since July is almost always the hottest month in any given year.

Even though the weather is not the "dominant force" in terms of driving natural gas prices in summer, as it often is in winter, it is difficult to ignore when reaching these extremes.

Prices have responded, with a large move higher, pushing the prompt month August contract to the 1.90 level, all the way near the top of our long-running continuous trading range.

Equally impressive, if not more so, is the move in the October - January (V/F) spread, now more than 20 cents off its low.

This indicates that, with current supply/demand balances, weather demand is pushing high enough so that the market feels risks for containment are lowering, but not gone, as we do not yet see how the data will shape up for the balance of the season.