With traders maneuvering ahead of a long holiday weekend, natural gas futures were headed for a second straight sell-off through midday Friday. Steep discounts were dominant in the physical market on deals for delivery over the Memorial Day break.
Here’s the latest:
- June Nymex futures down 8.9 cents to $2.568/MMBtu at around 1:45 p.m. ET; July off 10.0 cents to $2.823
“Volatility may remain elevated into next week with June options expiry and final settlement as traders reposition following the massive May move higher,” EBW Analytics Group analyst Eli Rubin said Friday.
Rubin highlighted the potential for prices to pull back after surging higher this month.
“We remain cautious of a natural gas pullback” given “a tricky holiday weekend and recent bearish leanings into monthly rollover,” the analyst said.
To help explain the recent selling Friday, NatGasWeather pointed to “profit taking” after prices rallied this month.
The firm also pointed to “rumblings that some companies are increasing production due to recent price strength.”
- Cash prices getting crushed ahead of Memorial Day weekend
- Henry Hub down 38.0 cents to $2.225, per NGI’s MidDay Price Alert
Physical traders Friday were left to weigh potential demand-dampening effects of the holiday versus expectations for some sizzling early-season heat over the southern Lower 48 over the weekend.
“The forecast is anomalously warm in the one- to five-day period, with peaks in the 90s for much of the South and 80s in the East,” Maxar meteorologist Brad Harvey said during a briefing on energy chat platform Enelyst on Friday.
The Electric Reliability Council of Texas territory was expected to experience the hottest days on Sunday and Monday, which are “days that wind generation projections have been trending lighter,” according to Harvey.
