It was another very volatile day in the natural gas space, as prices gapped up decently last evening, sold-off through the morning, spiked on cold risks in American model guidance mid-day and then sold-off hard into the settle. After all this the January contract settled up 1.3% on the day. 

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The January contract was the only one to log a gain on the day; the rest of the strip logged a small loss. 

The result was a decent tick back up in the F/H January/March spread following major declines last week. 

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These changes came as traders struggled to determine how best to react to weekend weather trends. This morning, 15-day Gas Weighted Degree Day forecasts were quite similar to what we forecast on Friday. 

In fact, we noted that 6-10 and 8-14 Day forecasts were almost exactly what we had predicted on Friday. 

Yet though the weather analysis was right and prices did initially sell off this morning on "Slightly Bearish" weather trends, that did not last long. 

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Cold risks remained on long-range GEFS American weather model guidance, which helped spike gas prices mid-day (images courtesy of Tropical Tidbits). 

Medium-range warm risks continued to intensify too, though, which tempered gains and was reflected again on afternoon Climate Prediction Center forecasts. 

The mixed strip action and shifting forecasts shows that traders are struggling to determine exactly which way to push natural gas prices in this narrowing wedge.