Warmer First Third Of February Eliminates Winter Gas Premium

It was another bloody day for natural gas bulls, with the February gas contract gapping down significantly and an early intraday bounce failing as well. The contract ended up settling down over 8% into options expiry. 

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natural gas commodity weather

The role of weather in the move was incredibly clear with the February contract logging by far the largest loss of the day. 

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natural gas commodity weather

This helped easily pull the March/April H/J spread to new lows. 

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natural gas commodity weather

Our Morning Update showed just how pronounced the GWDD losses were over the weekend, with most of them confined in the medium-range. 

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natural gas commodity weather

The Climate Prediction Center has been showing this more consistently too, with their Afternoon Update remaining quite warm through the 6-10 Day period. 

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natural gas commodity weather

In our Natural Gas Weekly Update for clients today we highlighted that it will easily hold the largest draw of the season so far with significant GWDDs last week. 

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natural gas commodity weather

Yet on a weather-adjusted basis, the print looks to be looser than last week, due in thanks to demand destruction from the Martin Luther King Jr. holiday last Monday. 

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natural gas commodity weather

 

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