The prompt month May natural gas contract rose a bit more than half a percent today as the summer contracts caught more of a bid. After gapping up weakly, prompt prices were unable to continue much higher, settling right at the $2.752 level they opened at.
Through the day contracts at the front of the strip ticked back lower while the summer strip remained more firm.
Support came from forecasts that were marginally more supportive in the short-term compared to Friday, even as the long-range warmed a bit over the weekend (as seen in our Morning Update).
In our Morning Update, we highlighted how these colder forecast revisions could allow a brief price bump from 8:30 to 9:30 AM as the cash market reacted to recent changes, which happened as forecast before prices settled down. There was then one more buying surge through around 10 AM eastern before we saw prices gradually pull back into the settle.
As prices pulled back losses were generally largest at the front of the strip, with a firm summer and fall strip resulting in one of the first declines in the K/M spread in quite awhile.
This comes as Columbia Gas Transmission reports that for the week ending on the 13th they withdrew 1.99 bcf of gas when typically they would have injected gas for the week.
Very strong cold across the East certainly played a role in that storage pull, as seen in the below graphic from the National Weather Service. This is what helped tighten K/M so much over the past couple of weeks, and on Thursday we will find out just how much gas this recent cold has helped us keep pulling from storage.
We broke all the latest storage dynamics and their role on recent price action down in our Weekly Natural Gas Update, which provides our weekly natural gas sentiment and looks at current and future weather expectations, storage dynamics, and technicals/spreads along the natural gas strip.