After what was a relatively slow week for natural gas prices, the February gas contract finally shot higher as all model guidance increased the intensity of cold in the final third of January. The contract logged an over 4% gain into the settle and continued higher sitting now up more than 6% on the day. 

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It was actually the March contract that eked out the largest gain on the day, with the February contract taking the lead post-settle but the entire strip rallying. 

This is exactly the rally we had been warning clients about all week was possible once weather cooperated, as we outlined that we expected bullish weather trends this week and held a "Slightly Bullish" weekly natural gas sentiment. 

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Yesterday we highlighted that our Slightly Bullish sentiment would continue into the day as we expect the dip yesterday afternoon under $3 would be brief, and in our discussion we said that "...with supportive model guidance $3.1 is in play tomorrow and/or early next week..." 

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Finally, this morning we reiterated that both $3.1 and $3.25 were in play into early next week, and we expected a rally today on overnight GWDD forecasts that held yesterday's colder trends. We also outlined that 12z models and Week 3 forecasts were likely to turn more bullish today. 

All this verified well with American and European model guidance showing very significant Week 2 cold risks this afternoon that shot gas prices through resistance. It started with American guidance, which showed very significant cold Days 12-16 (images courtesy of Tropical Tidbits). 

The Climate Prediction Center picked up on this too, increasing Week 2 cold risks in their latest forecast this afternoon. 

Their afternoon update also showed that cold was likely to linger in the East through Weeks 3-4.