On a day where all eyes were on the stock market, natural gas proved unexciting, settling down less than half a percent from its settle yesterday.
Prices traded within a rather narrow 8-cent range, which is far below the average trading ranges we have been seeing this winter.
Yet while the prompt month March contract declined about a cent, we saw the May and June contracts actually tick up slightly higher on the day.
This fit perfectly with our Morning Text Message Alert this morning, which warned of another support test but favored it likely holding given varied weather changes.
Then in our Morning Update we explained why we expected prices to remain in the $2.85-$2.92 tight trading range from overnight.
Even part of our intraday Note of the Day which focused both on short-term price action and expected weekend weather changes analyzed why the March contract was unlikely to decline much further through the day even as we dipped a cent below our expected range.
Much of this was because of conflicting weather forecasts, with our morning GWDD update for clients only adding .5 GWDDs from last night. Combined with our strip and technical analysis yesterday and today, we had warned that today was likely to be a relatively low volatility day and our sentiment was neutral. Initial mid-day model guidance did little to induce volatility, and CPC forecasts this afternoon were relatively unchanged.
This all came after an EIA print yesterday that came right in the middle of expectations and was not seen as particularly impactful.
The resulting movement in most spreads we monitor was muted as well.
Still, winter is far from over, and we expect volatility to return soon. We head into the weekend with an eye still on the weather, as a few colder trends on afternoon European guidance seemed to support prices into/after the settle. Yet the long-range pattern remains extremely volatile and is likely to drive natural gas prices significantly next week.
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