After a period of very slow trading, the prompt month natural gas contract saw a trading range of 11.1 cents today, its largest since February 21st. Trading ranges had been historically low recently as the market coiled, with today's move now fitting right in with past years.
Prices initially traded lower only to then shoot up on stronger cash prices and then a more supportive EIA print.
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The entire strip rallied significantly, though gains were clearly largest for the prompt month June contract.
The June isolation is best seen in the June/July M/N natural gas spread, which has rallied significantly over the past month and clearly logged another large gain today.
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The main catalyst today was that supportive announcement from the EIA that we injected only 89 bcf of natural gas into storage last week, as opposed to our estimate of 94 bcf. It was not a major miss, but it came on the lower side of most estimates in a week where many saw risk for a bearish miss.
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Prices have also been aided by seasonal strength. In our Note of the Day for clients on Monday we highlighted that this week we typically see significant seasonal strength before a mid-May peak, which thus far has played out well.
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