Thursday, November 29, 2018 at 5:02PM
Though the January natural gas contract settled down slightly on its first day as the prompt contract, it settled higher than it was initially ahead of the morning's EIA storage number, closing solidly off the lows. It was the March contract that lagged the most on the day still, with the January contract settling down just over 5 cents from yesterday's expiry spike. Prices fell initially overnight on warmer GEFS American model guidance, then shot higher on a colder European model run. We outlined these differences in our Morning Update for subscribers. Yet prices still meandered down ahead of the morning EIA print as traders positioned for a potential bearish miss and reacted to what may have been an overdone short squeeze yesterday (which is why we held a Slightly Bearish sentiment in our Afternoon Update yesterday). This worked well as the EIA announced 59 bcf of gas was pulled from storage versus our estimate of 67 bcf and market expectations just north of 70 bcf. This was a much looser print when compared to the previous week's very large draw. Certainly the Thanksgiving holiday played a role, but even so it still was a far looser print. Yet very cold medium-range forecasts helped prices rebound through the session still. Now traders are attempting to figure out how long-range forecasts will adjust over the weekend, as the Climate Prediction Center is showing more warm risks there. Any warm risks were a key focus in our Afternoon Update for subscribers today, where we broke down today's EIA print in more detail and explained how we see various catalysts from weather to daily weather-adjusted balances as likely to impact natural gas prices into early next week. To give this a look, and begin receiving all our detailed weather and natural gas-driven analysis, try out a 10-day free trial here.