Natural Gas Prices Pressured By Warm Weather And Weak Supply/Demand Balances

May natural gas prices closed today's trading session down about 5 cents on the day, arriving there by way of a general slow decline throughout the day. 

natural gas commodity weather

The decline was felt throughout the natural gas strip but was focused most on the front month contracts. 

natural gas commodity weather

Initially, the decline was due to a significant warming trend in overnight weather models, forcing forecasts to lower demand estimates this morning. 

natural gas commodity weather

This change pushed the 15-day forecast solidly to the warmer side of normal, and much warmer than the same period one year ago. 

natural gas commodity weather

On the supply side, natural gas production has finally returned back to near-record highs. 

natural gas commodity weather

With the increase in supply combined with the warmer, lower demand weather changes, we warned in our morning report that there was a "slightly bearish" risk to natural gas prices today. 

natural gas commodity weather

This worked out well, as prices did fall another 3-4 cents from the time our report was issued, with the supply/demand picture weak, and longer range weather data showing little sign of notably boosting demand. 

natural gas commodity weather

 

Disclaimer: To begin receiving both our technical and fundamental analysis of the natural gas market on a daily basis, and view our various models breaking down weather by natural gas demand ...

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