Unimpressive weather and loose balances prevented natural gas futures from recovering any of their recent losses in early trading Wednesday. The June Nymex futures contract was trading at $1.721/MMBtu at around 8:45 a.m. ET, up 0.1 cents.

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Prices have fallen off sharply since last week’s highs, which occurred on a rally following reports of an explosion on the Texas Eastern Transmission Co. (Tetco) system. Prices have come under pressure on a combination of unimpressive weather-driven demand the next 15 days, “weakening” LNG exports and Covid-19 demand destruction in the industrial and commercial sectors, according to NatGasWeather.

“Ever since the spike to $2.15 on the heels of the Tetco pipeline explosion…all bounces in price have been sold,” NatGasWeather said. “…For today’s trade, we look to see if July 2020 contracts can reclaim $2 after giving it up yesterday.”

Bulls may not find much support from forecasts until more heat arrives, according to the forecaster.

“Temperatures will warm across the northern U.S. late this week into the perfect 70s from Chicago to New York City for very light demand,” NatGasWeather said. “At the same time, Texas, the South and Southeast will warm into the mid-80s to lower 90s for an increase in cooling demand.

“However, weak weather systems next week are expected to trigger heavy showers over Texas and the South and Mid-Atlantic coast, preventing widespread coverage of 90s from setting up. As such, until more impressive heat builds, weather patterns will remain bearish biased.”

For the period starting next Monday and continuing through May 22, Maxar’s Weather Desk observed cooler changes for the eastern half of the Lower 48 in its latest forecast Tuesday.

“The adjustments are largely in response to the interaction of a mid-latitude storm system with a subtropical low in the western Atlantic during the early stages,” the forecaster said. “A trough deepens in the western Atlantic in association, effectively strengthening onshore flow along the East Coast during the early half while delaying the arrival of warmer air into the region.”

Further out in the May 23-27 time frame, Maxar’s forecast maintained a similar outlook to previous expectations. This includes above normal temperatures for the Southeast.

“Unsettled conditions surround the ridge from the Plains through the Great Lakes region,” the forecaster said.

The overall supply/demand balance continues to look “obscenely loose,” even with production in retreat, according to Bespoke Weather Services. The firm pointed to estimates showing LNG feed gas demand “well off its highs,” coming in at 6.4 Bcf/d as of early Wednesday.

“This is what the market seemed to focus more on yesterday, as the loss of LNG is a big deal given how loose we have been already,” Bespoke said. “We have not seen demand recover much yet as parts of our economy reopen, though we expected any return to be gradual, not a rapid large jump.

“We cannot rule out any price pops with production low, but sustainable rallies at the front of the curve still look difficult.”

June crude oil futures were trading 16 cents higher at $25.94/bbl at around 8:45 a.m. ET, while June RBOB gasoline was off about 2.0 cents to around 89.9 cents/gal.