The entire natural gas strip was led lower today, with the September contract settling down a bit less than a percent. Today was its options expiry, with traders pinning the contract right around the $2.85 level into the expiry. 

Lingering cash strength again helped keep the September contract from seeing the worst losses as the winter strip led us lower. 

This was the same trend yesterday too, as in our Morning Update we highlighted significant weakness all along the strip yesterday. 

The result has been a narrowing of V/F even as the September contract has sold off from $2.98 down to $2.85. 

This has come as some of the long-range heat risks have eased slightly, though heat across the East remains likely in Week 2 per the Climate Prediction Center. 

Price action today fit our expectations almost perfectly, with September prices testing the $2.85 level but not being able to move much below it.