In yet another unremarkable month of trading, the August 2015 Natural Gas contract closed up 6.5 cents, coming off the board at $2.886 per MMBtu. Warmer weather provided some support for the immediate term.
Natural Gas continues to be range-bound, which has been true for six months. Production and inventory remain strong, but demand is also strong. Warm weather has kept demand steady in the electric sector where natural gas has largely replaced coal as generating companies complied with EPA mandates to clean-up or close-up their coal plants.
As temperatures rise, prices turn upward, but in the absence of exceptional weather, this market is unable to trend decisively in either direction. The CY2015 NYMEX Settlement is now averaging $2.816/MMBtu. The September contract has moved into the prompt position and closed out the week at $2.716/MMBtu, a second day decline driven perhaps by a milder weather forecast for the month of August.