Natural gas prices started the week off with a modest rally, something that has not been seen for awhile in this steady grind lower. The April contract settled up around a percent on the day before continuing a bit higher from there.
After a gap lower and slow start for the April contract, it rallied through the day to actually be the largest gainer along the natural gas strip.
Over the weekend we saw weather trend even more supportive, as in our Morning Update we showed a net addition of GWDDs to clients. Most of these were focused in the medium-range, where a significant cold shot across the northern tier of the country appears likely.
The result were solid GWDD additions to our morning 15-Day GWDD forecast.
These were significant enough to pull our weather-driven natural gas sentiment to “slightly bullish” when the April contract was still flat on the day.
Supportive weather then combined with today’s options expiry to bump the April/May J/K contract spread into the settle.
After the settle data from Dominion (DTI) did show solidly less gas withdrawn this past week than the couple weeks prior, which should limit the EIA-reported withdrawal on Thursday.
Meanwhile, CPC 6-10 Day forecasts continued showing significant cold across the center of the country.