BWS Blog


Warm Mid-April Pressures Gas Futures Lower

Tuesday, March 26, 2019 at 6:27PM


It was another down day along the natural gas futures curve, with the April contract settling down around half a percent and the rest of the curve seeing more pronounced losses.

natural gas commodity weather

The April contract was actually strongest into options expiry, with the rest of the curve getting hit even harder.

natural gas commodity weather

The result was a pronounced move higher in the April/May contract spread, though this came back post-settle.

natural gas commodity weather

Our Morning Update was "Neutral" for subscribers, but highlighted slight GWDD losses and also explained that looser daily balances seemed to pose downside risks even when prices were creeping higher.

natural gas commodity weather

Afternoon Climate Prediction Center forecasts then moved towards our Week 2 ideas of widespread warmth.

natural gas commodity weather

Combined with long-range weather we are expecting a loose EIA number to be announced Thursday as well, as seen by smaller combined draws in DTI/TCO.

natural gas commodity weather

All this worked to limit upside Henry Hub futures today despite a small bump higher in Henry Hub cash prices.

natural gas commodity weather

Tomorrow traders have to contend with both the April contract expiry, which will certainly increase volatility, as well as the pricing in of expectations around Thursday's EIA number. Another small draw is expected, and there's a chance this could be the last draw of the season as well. In our recent reports we've been outlining for clients exactly what we expect with natural gas prices into expiry tomorrow and Thursday's EIA number, as well as how weather forecast changes can impact prices moving forward. Try out a 10-day free trial here to give it a look.