Natural gas prices continue to bounce around in a relatively narrow range the last few weeks as changes in weather model guidance keep pushing prices in varying directions. Initially, prices traded far lower this morning before some colder trends propped them up into the settle, with the November contract settling down just half a percent on the day.
On the week we saw significant declines along the front of the natural gas strip, though those were by far most significant for the March contract as concerns about aggregate storage levels headed into the winter eased.
A loose EIA print yesterday certainly contributed to that.
Meanwhile, at the front of the strip weather trends pushed prices lower, with warmth on models yesterday and overnight pushing the November contract into support at $3.1. Our Afternoon Update highlighted that despite a settle near $3.2 we expected prices to test $3.1 today.
Sure enough the November contract got just 2 ticks away, hitting $3.102 before reversing higher. Before that, though, our Morning Update today cautioned that balance trends including record LNG exports “may allow traders to defend the $3.1 level into the weekend, and any GWDD additions could quickly spike prices too.” That verified well as prices bounced off $3.1 and quickly rallied into the settle on colder model guidance, including colder medium-tern trends on GEFS model guidance (as seen below courtesy of Tropical Tidbits).
Our intraday Note of the Day also reiterated that we saw slightly more supportive balances today, thanks in part to LNG exports.
In those Notes we also look at weather-adjusted power burns as well as res/comm and industrial demand, Canadian imports, production, and the latest Week 3 weather forecasts. Our Note yesterday published right after prices spiked following a bearish EIA print highlighted that we expected the rally to fail and that $3.1 would be put in play, as it clearly was today.
