Volatility remains the name of the game in natural gas, with at the money implied volatility continuing higher through this past week for the January natural gas contract which shot higher early this morning. It then plunged to re-test lows into the settle and is now bouncing post-settle yet again. At the settle prices were down almost 4% on the day after being up even more than that earlier this morning. 

Again it was the January contract logging the largest loss on the day, with significant losses for the February and March contracts as well. 

Each of the moves seemed to have a reason today too. Overnight and early this morning traders were speculating that we could see a significantly bullish EIA print at 10:30 AM Eastern, and we noted small GWDD gains overnight too. 

Then the EIA announced that 141 bcf of natural gas was withdrawn from storage last week, which was a bit bullish to our estimate of 133 bcf. 

Yet despite this bullish miss to our expectations we highlighted to clients immediately after that we still only saw the print as "Neutral" for natural gas prices today as next week's print should be looser and weather remained in charge with more mixed risks. 

Sure enough, right after the print prices pulled back to the $3.75 level that we had highlighted in our Morning Update prices were likely to test. We then released our intraday Note of the Day highlighting that prices seemed fairly valued there, but much warmer afternoon model guidance would put $3.6 in play while colder guidance would put $3.9 back in play again today. 

American model guidance trended significantly warmer, and that was the impetus for the price move down to the $3.6 level that we settled near (model images courtesy of Tropical Tidbits). 

However, European model guidance post-settle trended colder, allowing prices to recover many of their losses and bounce back up. Climate Prediction Center forecasts showed these decreased warm risks in the long-range too.