Very Strong Cash Cancels Out Weekend HDD Losses

It was a case of dueling catalysts in the natural gas market today, as a day ahead Henry Hub cash prices skyrocketed over $4 early this morning pulling the April gas contract higher but weekend HDD losses prevented any gains from holding. In the end, the April contract settled just about flat on the day. 

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natural gas commodity weather

The largest losses were with summer gas, as winter gas was firmer on the day. 

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natural gas commodity weather

Very strong cash prices have pulled the April/May spread to flat. 

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natural gas commodity weather

Exploding day ahead prices today returned to levels that have not been seen since December. 

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natural gas commodity weather

In our Morning Update we warned that "cash should remain quite strong" but maintained a "Neutral" sentiment as saw recent GWDD losses canceling that out. The coldest days are in the short-term, as we noted, which would limit the extent to which futures would react to cash. 

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natural gas commodity weather

This verified quite well, as gas prices reversed lower through the day and the Climate Prediction Center picked up on these more pronounced warm risks in the medium and long-range. 

natural gas commodity weather

 

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Adam Reynolds 1 month ago Member's comment

Good stuff, thanks.