There was widespread selling of natural gas futures again today as overnight weather model guidance trended solidly warmer and the weekly EIA natural gas storage update yielded a smaller-than-expected storage withdrawal last week. At the end of the day, the March contract settled down a bit more than 4%. 

(Click on image to enlarge)

Losses were by far most pronounced at the front of the strip yet again, with bearish weather changes and cash prices not particularly strong in the face of cold weather tomorrow and this weekend. 

(Click on image to enlarge)

The result was that the March/April H/J spread finally flipped into contango for the first time. 

(Click on image to enlarge)

Much of this move was driven by the morning's EIA Natural Gas Weekly Storage Report when the EIA announced that 237 bcf of gas was withdrawn from storage versus our expectation of 253 bcf. 

(Click on image to enlarge)

This was another very loose print that confirmed we have ample production and gas headed into the tail end of winter and the spring shoulder season. Though not as loose as last week's storage number, it provided little reason to rally. 

(Click on image to enlarge)

Immediately following the number we sent out our EIA Rapid Release, which outlined that we saw the number as "Moderately Bearish" for natural gas prices moving forward. 

(Click on image to enlarge)

Gas prices then continued lower from there, with afternoon model guidance doing little to help stabilize prices (though European ensemble guidance did add several GWDDs). Climate Prediction Center forecasts showed more warm risks Week 2 over yesterday, which we had covered in our Morning Update.