The May natural gas contract rallied a bit over a percent today, even as EIA data disappointed bulls.
Much of this occurred overnight, with bullish weather model runs confirming sustained cold in early April. This was reflected in the GWDD forecast in our Morning Update for clients.
EIA data was unimpressive, as the EIA announced that only 63 bcf of natural gas was pulled from storage last week (far less than our 71 bcf estimate), and prices fell off the print and were unable to regain their highs on the day.
The result was a day where strong cash prices and bullish weather propped up the front of the strip while later contracts lagged.
Overall, though, it was a bullish week for the prompt month natural gas contract, which rallied 5.5% (including a small positive roll from the April to the May contract). We forecast this bullishness in our Weekly Natural Gas Report for clients back on Monday, where we saw weather as skewing price risk higher this week.
In that report we even warned that cold may linger longer than some expect, which would be moderately bullish for the natural gas market.
The impact of the cold culminated in prices overcoming a bearish EIA print and still settling up slightly on the day.