Natural gas futures retreated in early trading Wednesday as analysts predicted more volatility heading into the prompt month expiration. The August Nymex contract, set to roll off the board Wednesday, was down 24.3 cents to $8.750/MMBtu at around 8:45 a.m. ET.

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Natural gas prices went on a “wild ride” in Tuesday’s session, turning in a “violently volatile” day of trading, Bespoke Weather Services observed. 

Price action, which saw the August contract go as high as $9.752 before pulling back, appeared to be “driven by money flows/positioning rather than changes in the data, as we do often see around the time of contract expirations, albeit not usually this wild,” Bespoke said.

Technically speaking, there could be “more downside pressure the next couple of days” after Tuesday’s trading “produced a rather ugly daily candle on the chart,” according to the firm. Still, “the longer this heat sticks around at a high level, the more the risk buyers will step back in again, as injections can remain bullish thanks to high demand.”

Weather models underwent only small changes overnight in terms of cooling degree day expectations, according to NatGasWeather.

Both the American and European datasets “remained impressively hot with strong to very strong national demand” from next Tuesday (Aug. 2) through Aug. 10, the firm said. 

During this time frame “upper high pressure rules most of the U.S. with highs of 90s and 100s apart from highs of 80s across the far northern U.S.,” NatGasWeather added. “Before then, national demand will be only slightly stronger than normal through the weekend as weather systems track across the Midwest, Ohio Valley and Northeast with showers and comfortable highs of 70s and 80s.”

Trading figures to be “exceptionally volatile” over the next couple days as the expiration of the August contract and a “highly anticipated” storage report from the Energy Information Administration (EIA) factor into prices, NatGasWeather said.

Despite the cushion created by the 2 Bcf/d Freeport LNG terminal going offline for an extended duration, “deficits are likely to increase further as the next three EIA storage reports are favored to print slightly under five-year averages due to widespread U.S. heat,” the firm said.