LONDON (Commodity Online): Natural Gas prices seesawed on Monday, falling as low as $4.47 per MMBtu shortly after the markets opened, then rallying above $4.60 just after midday.
Yet, the prompt month ultimately settled unchanged from Friday, at $4.54, and the rest of calendar 2011 remained at $4.61. Calendar 2012 strengthened by a cent to $4.93. The sharp intraday moves came in tandem with a shift of weather forecasts to yet more extreme heat ahead.
The eastern half of the country is expected to see near record temperatures over the next five days, with over 100F readings forecast along the I-95 corridor. Above-normal temperatures are also forecast for the Midwest, and they are expected to persist into the 6-10 day period.
Meanwhile, parts of Texas have already had two weeks of over 100F readings, and this could continue for another week. The concerted pull on Natural Gas demand in the key consuming areas of the country will likely result in a low injection reported next week.
While this could support the market temporarily, a sustained price strength would require sustained support from weather, in our view. Cash markets strengthened for the vast majority of the country, with Henry Hub up 11 cents to $4.60. Transco Zone-6 New York jumped 63 cents on the forecasts for extreme weather to $5.44, and SoCal border gained 20 cents to $4.53.
