The September natural gas contract settled up around a percent on the day as strong cash prices got prices moving higher this morning.
After dipping late last week and remaining flat yesterday, Henry Hub cash prices rose solidly today.
In our Morning Update, we outlined that stronger cash prices today combined with a strong strip would pull the September contract up from the $2.93 level it was trading at into $2.95-$2.96, and that $2.98-$3 was possible but unlikely. Sure enough, prices spiked this morning but peaked at $2.974.
In that same update, we outlined that afternoon model guidance was likely to trend cooler again today.
Both European and American guidance trended cooler this afternoon in the medium-range, fitting our expectations perfectly and pulling the front of the natural gas strip back.
The result was a further decline in the U/V September/October contract spread.
Medium-range Climate Prediction Center forecasts cooled further as well to meet our expectations.
