Hotter US Weather Pattern Coming Second Half of June
June 5, 2023: July’23 nat gas prices closed 2¢ higher Friday at $2.17, while ending a 5-session losing streak that dropped prices from $2.48 to $2.15. Strong selling last week was attributed to cooler trends, the EIA report printing a hefty build of +110 Bcf, US production strong at 101-102 Bcf/day, and plump surpluses of +349 Bcf. Strong selling was also viewed as being due to negative roll yield as newly anointed front month July’23 contracts dropped into the cheaper range of where Jun’23 contracts were trading prior to expiration. As we mentioned in our Friday reports, odds favored hotter trends during the weekend over cooler trends and that’s what’s happened as both the GFS and EC trended 3-5 CDDs hotter, and mainly for June 14-20 period.
No changes to timing as the weekend data maintained light national demand through June 12-13 due to most of the US experiencing comfortable highs of 60s to 80s, then with national demand increasing to strong levels June 14-20 as upper high pressure builds over Texas, S. Plains, the South, and Southeast w/highs of mid-90s to lower 100s gaining coverage. Essentially, while the pattern through June 12-13 still isn’t hot enough to satisfy, the pattern for mid and late June favors increasing heat and stronger national demand as Texas and surrounding states heat above normal.