Tuesday, January 29, 2019 at 3:46PM
Things were initially ugly in the natural gas market this morning, with the February contract plummeting on weak cash prices as the February/March G/H spread fell to flat. Afternoon models showed more cold risks and a firm strip indicated morning selling was overdone, though, with the whole strip then settling about a percent higher on the day. The March contract was the biggest loser at the front of the strip, but gains were rather uniform overall. The result were minimal changes in the day-over-day February/March G/H spread into expiry despite a significant move earlier this morning. The March/April H/J spread even ticked down on a day where we logged a gain at the front of the strip. This support came from some more supportive afternoon weather model guidance, which the Climate Prediction Center showed in its Week 2 forecast probabilities today. In our AM Update for subscribers we highlighted that Week 3 changes and 12z models were likely to be more supportive for natural gas prices today. We also held our subscriber-only live chat where we described how we expected weather model guidance to change through the week and broke down the latest natural gas spread action and balance dynamics. Of note was LNG exports that are still sitting in the middle of their recent range. Then in our Afternoon Update we explained how we saw natural gas risk skewed overnight and how weather models were likely to adjust into tomorrow. We also explained our view on Thursday's EIA print and what it should show about current gas balances. Try out a 10-day free trial here to give all this research a close look.