Warm Mid-April Pressures Gas Futures Lower

It was another down day along the natural gas futures curve, with the April contract settling down around half a percent and the rest of the curve seeing more pronounced losses. 

(Click on image to enlarge)

natural gas commodity weather

The April contract was actually strongest into options expiry, with the rest of the curve getting hit even harder. 

(Click on image to enlarge)

natural gas commodity weather

The result was a pronounced move higher in the April/May contract spread, though this came back post-settle.

(Click on image to enlarge)

natural gas commodity weather

Our Morning Update was "Neutral" for subscribers, but highlighted slight GWDD losses and also explained that looser daily balances seemed to pose downside risks even when prices were creeping higher. 

(Click on image to enlarge)

natural gas commodity weather

Afternoon Climate Prediction Center forecasts then moved towards our Week 2 ideas of widespread warmth. 

natural gas commodity weather

Combined with long-range weather we are expecting a loose EIA number to be announced Thursday as well, as seen by smaller combined draws in DTI/TCO. 

(Click on image to enlarge)

natural gas commodity weather

All this worked to limit upside Henry Hub futures today despite a small bump higher in Henry Hub cash prices. 

(Click on image to enlarge)

natural gas commodity weather

Tomorrow traders have to contend with both the April contract expiry, which will certainly increase volatility, as well as the pricing in of expectations around Thursday's EIA number. Another small draw is expected, and there's a chance this could be the last draw of the season as well.

Disclaimer: To begin receiving both our technical and fundamental analysis of the natural gas market on a daily basis, and view our various models breaking down weather by natural gas demand ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.