Market

Fundamentals were relatively steady Monday, but some technical influences ahead of natural gas futures expiration helped drive prices considerably higher to start the week. With solid gains in the cash market as well, the September Nymex gas contract jumped 7.8 cents to settle Monday at $2.230/MMBtu. October rose 7.7 cents to $2.233.

After netting barely 2 cents over the previous two sessions, natural gas futures took a more definitive turn on Wednesday as widespread summer heat appears to be drawing to a close. Following a steep sell-off in cash markets, the September Nymex futures contract tumbled 4.8 cents to $2.17, and October fell 4.2 cents to $2.177.

Natural gas futures were rather volatile on Wednesday as weather models remained relatively intact, with some datasets hotter and others cooler. Traders also weighed the impact of expectations for yet another larger-than-normal storage injection on Thursday. The September Nymex gas futures contract fluctuated in a roughly 8-cent range before going on to settle just four-tenths of a cent lower at $2.143. October slipped a half-cent to $2.154.

Even as weather data did its part to support natural gas prices, other weak fundamentals sent Nymex futures down a couple of notches to start the week. The September Nymex gas contract settled Monday at $2.105/MMBtu, down 1.4 cents. October slipped 1.6 cents to $2.117.

Natural gas bears picked up right where they left off last week, slaughtering the Nymex futures curve on Monday as feed gas deliveries to a pair of Gulf Coast liquefied natural gas (LNG) export terminals continued to decline and weather forecasts showed heat mostly limited to the southern United States for the next couple of weeks.

With the end of summer fast approaching, natural gas bulls seized their moment Wednesday as a hotter forecast helped to rally prices off a key support level. In the spot market, Gulf Coast prices followed futures higher; the NGI Spot Gas National Avg. climbed 4.5 cents to $2.000/MMBtu.

Natural gas bulls hoping for a spark from the latest forecasts came away disappointed Monday, as cooler trends combined with bearish underlying fundamentals to send the August contract falling into expiry. In the spot market, a hot start to the week for the East Coast spurred modest gains at locations throughout the region; the NGI Spot Gas National Avg. added 1.5 cents to $1.985/MMBtu.

A lack of heat helped sink natural gas futures Wednesday as demand continues to struggle to keep pace with supply growth. In the spot market, hot temperatures supported continued strength in Southern California, while locations farther east generally headed lower; the NGI Spot Gas National Avg. eased 2.0 cents to $2.045/MMBtu.

In contrast to last week’s heavy sell-off, natural gas futures rallied Monday on the promise of additional heat arriving later this month. Meanwhile, hotter temperatures helped spark strong spot price gains for much of California and the Rockies; the NGI Spot Gas National Avg. climbed 6.5 cents to $2.075/MMBtu.