Weaker Cash And Briefly Warmer Models Let April Gas Retrace

The April natural contract settled down around a percent and a half as overnight weather models moderated slightly and Henry Hub day-ahead cash prices plunged below $3. 

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natural gas commodity weather

After spiking over $4 to start the week Henry Hub day-ahead cash traded back under $3 today. 

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natural gas commodity weather

Such cash action was enough to depress the April contract relative to the rest of the futures curve. 

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natural gas commodity weather

Thus the April/May J/K spread took a large turn down on the day. 

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natural gas commodity weather

This fit our expectations well, as we turned our sentiment "Slightly Bearish" in our Morning Update due to bearish spreads, warmer overnight model trends, and other fundamentals we saw moving in a bearish direction.

natural gas commodity weather

Overnight models were not all that much warmer, but GWDD losses were allowed to let the front of the curve at least retrace recent gains. 

natural gas commodity weather

Then prices were able to bounce into the settle on colder afternoon weather model guidance, which the Climate Prediction Center showed in their Week 2 forecast probabilities as well. 

natural gas commodity weather

 

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 ...

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