Weather Models Keep Gas Bouncing Around

The March natural gas contract had a range of almost 7 cents today yet settled only two ticks higher as prices rallied then sold off on disagreeing weather models. 

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natural gas commodity weather

The March contract was actually the weakest on the day, as later contracts exhibited more strength and warmer early afternoon weather models took their toll at the front of the futures strip the most. 

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natural gas commodity weather

The result was a move lower in the J/V April/October spread even as prices rose. 

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natural gas commodity weather

Prices initially rallied this morning in line with our expectations, as we warned clients in our Morning Update that modest overnight GWDD additions would allow prices to bounce. 

natural gas commodity weather

However, we also warned that weak cash prices could drag down the March contract after an initial bounce, which played out well. 

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natural gas commodity weather

Then after a second bounce, the GEFS weather model guidance trended warmer in the long-range, hitting the March contract hardest (image courtesy of Tropical Tidbits). 

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natural gas commodity weather

(Click on image to enlarge)

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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