After a slow start early this morning, natural gas prices attempted to rally with the June contract leading the whole strip higher from $2.7 to $2.77. The high of the day was set just after 9 AM Eastern on that price spike, however, with the strip gradually pulling down the June contract through the rest of the day. 

Later contracts clearly dragged down the front through the trading day, with the June contract by far logging the largest gain on the day. 

The winter strip weakened through the day quite a bit to the point where the October/January V8/F9 spread settled at its most narrow level of the year, even as the June contract settled quite a bit off from its recent highs. 

Even though the front of the strip attempted this broader rally, it did not appear to be a significantly weather-driven rally, as in our Morning Update we noted some cooler trends from May 15th through the 20th that would limit cooling demand. 

This generally fits with what we laid out in our Friday Pre-Close Update, though we did not yet add quite as much long-range heat in the final third of May as expected. 

Our Note of the Day from last Friday for clients caught onto this as well. 

Today the June contract did dip down to $2.695 before buyers arrived, but from there prices were able to significantly recover and at least temporarily hold that support. Still, traders are awaiting what should be a far larger injection to be reported by the EIA on Thursday. Already, Dominion Transmission has announced a storage injection 2 bcf larger than last week (though 1 bcf smaller than the comparable week last year). 


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