This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.

Natural Gas Market Shrugs Off Bearish EIA Report, Finishing The Week Strong

Friday, May 28, 2021 at 7:11PM

It has been an eventful couple of weeks in the natural gas market, with prices ending this week strong, despite a second consecutive bearish EIA report yesterday. The prompt month July contract did wind up settling a few cents off its intraday high, still within the $2.90 to $3.00 prompt month trading range that has dominated for a month now, but on the high end of the range.

prompt month natural gas

We mentioned the bearish EIA report, which temporarily took prices to the low end of the range yesterday, as the EIA revealed a build of 115 bcf for last week, confirming what we saw last week, in that supply / demand balances had loosened appreciably.

last 10 gas weeks

Also, today’s Henry Hub cash prices were weaker day-over-day, meaning that the rally took the prompt-to-cash spread higher than it has been for awhile, ending the day at just under 15 cents, which is wider than the market “typically” has been comfortable with.

prompt natural gas henry hub cash

Given the combination of yesterday’s report, and weaker cash prices today, where did the strength in prices come from? The main factor lies in the weather, as, despite the current cooler shift, heat is expected to return rather quickly, with all regions outside of the South running hotter than normal.

weather demand

This equates to Gas-Weighted Degree Days (GWDDs) that will be well above normal starting around June 5th.

GWDD Forecasts

This makes it easier to look past the current bearish factors, as the increase in GWDDs means higher gas burns are on the way, and also, in theory, can result in higher Henry Hub cash prices, hence the buying in today’s session. Sounds simple enough, right? Time will tell, as this market typically does not like to make things easy for those who trade it. Constant monitoring of data is a must.

This is where we at Bespoke Weather Services come in. For a very affordable cost, our products provide a unique blend of weather and natural gas fundamentals, keeping the active trader up to date on all of the latest changes, and how those changes will influence price action. Best of all, you can sign up for a 10-day FREE trial here, in order to give our products an obligation-free test drive.

Originally Posted on May 28, 2021 – Natural Gas Market Shrugs Off Bearish EIA Report, Finishing The Week Strong

Disclosure: Bespoke Weather Services

Disclaimer: Bespoke Weather Services, LLC believes all information contained in this note to be accurate, but we do not guarantee its accuracy. None of the information in this post or any opinions expressed constitute a solicitation of the purchase or sale of any securities or commodities.

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Bespoke Weather Services and is being posted with permission from Bespoke Weather Services. The views expressed in this material are solely those of the author and/or Bespoke Weather Services and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

Disclosure: Futures Trading

Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at

trading top