Depleting Salt Storage And Firm Cash Keep April Gas Bid

The April natural gas contract rallied a bit over a percent today despite an EIA number that was not quite as bullish as the market consensus, as the EIA still reported a massive draw in salt cavern storage and day ahead cash prices were firm. 

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natural gas commodity weather

The April contract was easily the strongest along the futures curve today. 

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natural gas commodity weather

The rest of the curve barely contributed, as seen by the April/October J/V spread shooting higher on the day. 

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natural gas commodity weather

Day ahead cash prices trading slightly above prompt month future prices have helped keep prompt month prices strong the last couple days as well. 

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natural gas commodity weather

Meanwhile, the EIA announced that 204 bcf of natural gas was pulled from storage last week versus our estimate (that was near the market consensus) of 209 bcf. 

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natural gas commodity weather

This week's storage number was seen as about in line on a weather-adjusted basis to the number last week and solidly tighter than the week before, though of course there was far more weather-driven demand last week than the week prior. 

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natural gas commodity weather

Traders are now looking at how daily balances are changing ahead of the weekend as well as what next week's EIA number could indicate about the seriousness of the current storage deficit. 

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