BWS Blog


Natural Gas Crushed On Weaker Physical Prices And Long-Range Warmth

Tuesday, January 22, 2019 at 4:38PM


It was a slaughterhouse at the front of the natural gas strip today, with the February contract settling almost 13% lower from its Friday settle.

natural gas commodity weather

Weaker cash prices certainly played a role, as traders were looking for cash to provide some strength for the market and instead it led the way lower this morning.

natural gas commodity weather

The result was by far the most losses at the front of the strip on the day.

natural gas commodity weather

The February/March spread set a new low on the day with such February-concentrated selling.

natural gas commodity weather

This pulled the G/H spread right back into the historical range.

natural gas commodity weather

Much of the cash weakness today appeared to be due to looser balances. We outlined these looser balances for clients today in our Note of the Day and again in our live chat, where we looked at a large recent dip in LNG exports.

natural gas commodity weather

We also outlined how we expect weather model guidance to trend through the coming week in our flagship Natural Gas Weekly Update, and observed Climate Prediction Center forecasts tick warmer again this afternoon for Week 2.

natural gas commodity weather

Then in our Afternoon Update we summarized the latest 12z weather model changes and how we see natural gas risk skewed into next week. We looked at the latest spread action and recapped today's balance dynamics while updating our natural gas sentiment. Try out a 10-day free trial here to give it a look.