Natural gas prices sold off today as the market continued focusing on balance and saw slightly less impressive weekend weather trends we alerted clients about this morning. In the end the May contract declined a bit less than 2%, reversing off $2.75 resistance that had lingered from last week.
Losses were worst at the front of the strip.
Still, weather in at least the short-term remains incredibly impressive. In our Morning Update for clients we showed that our GWDD forecast for April 7th is for the 4th most GWDDs on that date since 1981. While not record-breaking, that is still impressive.
In that same update we showed some recent warming trends that appeared partially responsible for a pullback in natural gas prices.
This came after models over the weekend trended in exactly the same way as we had warned clients they would in our Friday Pre-Close Update.
Of course traders are similarly focused on balance, especially in shoulder season. Dominion (DTI) announced that 6 bcf of natural gas was pulled from their storage last week, below the 10 bcf from the week before but large enough to indicate at least a modest withdrawal can be expected to be announced Thursday.
In our Weekly Natural Gas Update today we took a closer look at both balance and weather, breaking down how weather forecasts are likely to change through the week and how much that should impact natural gas prices given current balance. We look at the both balance and weather expectations in the context of stockpiles far below the 5-year average as well, as shown in the below chart that we update in the report weekly.