The March natural gas contract dipped about a percent on the day as the winter strip dragged down the front on concerns of oversupply following several loose EIA storage numbers.
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Strong cash prices helped March settle as one of the strongest contracts on the day.
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Prices were initially higher this morning on small overnight GWDD additions as well.
However, afternoon GEFS guidance was a bit less impressive with medium-range cold, and weak spreads pulled the March contract down as well. In the end the April/October J/V spread settled around flat, though for a while it was again trading narrower on the day.
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Most traders are focused on the EIA number coming out tomorrow morning, though, which should show a large draw following a solidly colder week last week.
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The last several prints have all been quite loose, which could help explain the weakness in natural gas prices the last few weeks. We would expect a significant reaction around this print, and in our Seasonal Trader Report for clients updated our forward storage expectations off of our 5-month GWDD forecast and latest reading of balance. Of note in tomorrow's EIA number will be a return of LNG exports, helping explain the far larger draw versus the previous week.
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Yet even still the week was not all that cold, with GWDDs near seasonal averages. We would look for a large draw in the Midwest, which was coldest through early last Friday.
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