Colder Forecasts Can't Save Gas After Bearish EIA Storage Number

It was another red day in the natural gas market, as prices initially rallied overnight on colder weather model guidance but were pulled back lower on weaker physical prices. A bearish EIA print then helped the March contract settle a bit more than a percent lower. 

natural gas commodity weather

We can see how the whole strip made a solid leg lower that was actually led down by later contracts. 

natural gas commodity weather

The result was that the March/April H/J spread actually ticked higher on the day despite all 2019 contracts logging decent losses on the day. 

natural gas commodity weather

At first, prices were strong as we added some GWDDs overnight, as we showed in our Morning Update. 

natural gas commodity weather

Afternoon weather model guidance trended colder with most models increasing cold risks in Week 2. 

natural gas commodity weather

natural gas commodity weather

Yet EIA storage data came out incredibly bearish, with the EIA announcing only 173 bcf of gas was withdrawn from storage. 

natural gas commodity weather

We were looking for a draw of 189 bcf and even then were slightly below the market consensus that was a bit higher. This print was very loose on a weather-adjusted basis, even when taking into account the Martin Luther King Jr. holiday. 

natural gas commodity weather

Tomorrow traders will continue reacting to today's loose print while also looking ahead to the weekend and seeing if any cold risks can persist. 

Disclaimer: To begin receiving both our technical and fundamental analysis of the natural gas market on a daily basis, and view our various models breaking down weather by natural gas demand ...

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