Gas Tries To Set A Bottom Despite Very Bearish EIA Storage Number

Excitement began to return to the natural gas space as the February contract shook off a very small storage draw announced by the EIA to rally over 3%. 

natural gas commodity weather

The February contract was not alone, as the entire natural gas strip rallied Friday. 

natural gas commodity weather

Such a bullish move was not particularly surprising as t in our Morning Update we changed our daily natural gas sentiment to "Slightly Bullish" for the first time as we saw "increased long-range cold risks" that could support prices, with GWDD additions helping cancel out what we said would be, "...a very bearish EIA print..." 

natural gas commodity weather

 

natural gas commodity weather

Yet this very bearish EIA print turned out to be even more bearish than we expected, as we were looking for a -42 bcf net implied flow to be announced by the EIA before they announced a minuscule -20 bcf net implied flow. 

natural gas commodity weather

All last week we had been warning clients that we were looking at the loosest weather-adjusted power burns of the season, and we did see bearish risks with our estimate today, but the magnitude of the miss was certainly a surprise with a large 22 bcf build in Salt storage. 

natural gas commodity weather

While the print was quite loose relative to the last several weeks, there is little doubt that the Christmas holiday played a large role too, as comparatively the storage withdrawal was not *as* loose when looking at just other weeks that held Christmas. 

natural gas commodity weather

Yet gas prices shook this off as we warned was possible, and some colder risks on afternoon GEFS weather model guidance helped as well (images courtesy of Tropical Tidbits). 

natural gas commodity weather

 

Then just recently we released our Pre-Close Update which outlined our expectations for how weather model guidance will trend over the weekend and how we see natural gas price risk skewed next week. ...

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