It was another rough week for natural gas bulls, with the February natural gas contract settling over 13% below where the January natural gas contract settled last Friday. 

(Click on image to enlarge)

With the January contract now off the board, it was the February contract that logged the largest loss on the day while the March contract actually saw the largest weekly loss. 

Weakness today was not particularly surprising as in our Morning Update we warned that "...overnight weather model guidance was unimpressive enough to put a test of $3.25-$3.3 in play..." 

Sure enough, this verified well with the February contract setting a low on the day at $3.278 as afternoon model guidance was again unimpressive (images courtesy of Tropical Tidbits). 

EIA data today did little to spark buying interest in natural gas too, with the EIA announcing a storage draw of 48 bcf. 

(Click on image to enlarge)

This was just 2 bcf from our -50 bcf expectation.

The print confirmed that the market had loosened in recent warm weather, showing that last week's tighter print was a bit of an outlier and following right in line with the balance of the last 10 gas weeks. 

(Click on image to enlarge)

Today we also looked at the latest balance trends this week and how they could impact next week's EIA print, which also covers a week with quite a bit of warmth. 

Though gas prices have fallen off quite a bit and implied volatility has taken a plunge, winter is far from over, and there are likely to be quite a few more price moves from here.