Volatile natural gas futures were trading sharply lower early Friday amid a cooling weather outlook, though analysts continued to see upside risks for prices. The June Nymex contract was down 27.7 cents to $8.031/MMBtu at around 8:50 a.m. ET. July was off 27.8 cents to $8.122. 

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Forecast trends were cooler day/day, with changes focused on next week, Bespoke Weather Services said early Friday.

Still, “all models remain adamant about the return of stronger heat as we end the month and head into the start of June,” the firm said.

There was little in the underlying fundamentals data to justify the strong sell-off early Friday, according to Bespoke. The firm said it still viewed the outlook for natural gas as bullish overall.

“Production remains a bit off highs,” while...