Despite August contracts retesting the lows near $1.70/MMBtu, natural gas producers continue to outperform prompt month contracts.

Today's price action along the curve gives you a great illustration of why that's the case. Front months are underperforming while the 2021 curve is moving higher.

That's because price weakness near term is explainable, while the driving force for higher prices in 2021 and beyond comes from a structural issue - lower production.

Rystad estimates that with production falling below ~83 Bcf/d in 2021, even excluding LNG exports, the market will be in a deficit.

This is why natural gas producers will continue to outperform natural gas prices.