The Summer Solstice occurs around June 20th or 21st (depending upon your time zone) and technically marks the first official day of summer. For many of us, however, we gauge the start of summer by the weather! This year, traders have continued to expect above-average temperatures to occur and help boost a bullish rally in natural gas prices, but Mother Nature has had other ideas. The June contract expired at the start of Memorial Day weekend, settling at $3.2360 per MMBtu. After trading down much of the day, prices reversed course and settled up 1.63%, but still down 5.5% from the past two weeks. Natural gas storage injections have been relatively small this year, in comparison to previous years, revealing the tighter balance between supply and demand. Traders, however, continue to focus on the weather forecast and the anticipated mild temperatures are limiting demand. The number of working rigs has doubled across the country from a year ago and while most of the drilling targets oil, the associated gas from this production continues to build domestic natural gas supply. Without a heat wave to increase demand, the market struggles to maintain bullish momentum. The July contract is currently in the prompt position and spent its first week of trading in this position hovering near the $3.00 per MMBtu level.
