It was another relatively slow day of natural gas trading today, with the September contract trading in a narrow 4.3-cent range. Prices declined this morning on cooler weekend weather forecast trends, but bounced seemingly on storage concerns to settle just above flat on the day.
This is the second day where prices have been unable to break above the prompt month contract 60-Day Moving Average, and again we saw the winter contract firm up today too.
The result was that the V/F October/January spread actually widened on a day where the front of the strip ticked higher.
Most of the day’s move was actually a sell-off that reversed itself, however. Our Morning Update highlighted some slight GWDD losses versus our Friday forecast.
Climate Prediction Center forecasts continued to show cool risks across the South. Yet elsewhere these is still decent heat, and we have accordingly seen estimates for how much gas will be in storage come withdrawal season march lower since last Thursday’s bullish EIA print.
We also have seen daily natural gas supply/demand balance figures indicate a shift in market dynamics over the last few days as well, and this could work to increase volatility moving forward. This was a main focus of our Note of the Day for clients today, which looked at price action through the day and outlined how risk was skewed moving forward. Our Afternoon Update also looked at these daily balance numbers and combined them with our latest custom weather forecasts.
