After a bit of a wild ride, the June contract pulled back yesterday to a one month low and settled at $1.963 per MMBtu. This marks the fourth month in a row that natural gas settled below $2.00 per MMBtu and the CY2016 average now sits at $2.022 per MMBtu. A decline in production and a projection for early summer heat sent the June contract trading as high as $2.195 per MMBtu, but instead, most of country has experienced milder and wetter conditions through much of May. Although natural gas storage injections have slowed and are below historical averages for this time of year, the surplus continues to loom and limit bullish price runs. Most weather forecasts show mild temperatures continuing into mid-June for much of the U.S. Until this market experiences significant heat to drive demand for natural-gas fired power, bearish pressure will remain on pricing.
