Further GWDD Additions Continue To Support Natural Gas

Despite declines overnight and into the morning hours, natural gas prices were able to recover today and settle a bit higher following their significant rally yesterday. Much of this appeared to be due to continued GWDD additions to the short and long-term weather forecasts. 

Part of this is coming from recent cash strength ahead of a significant cold snap. 

In fact, we are expecting November 11th to create the most heating demand for the date since 1997, as significant cold will move from the Midwest all the way into the Northeast. 

The result is that natural gas prices have rallied significantly from their bottom last week. This was not seen as much of a surprise, as last week we were warning clients to expect a V-bottom in prices once cold arrives, though admittedly we warned it could take a bit longer. The below Report Summary comes from last week’s Weekly Seasonal Trader Report which we updated again today; it forecasts seasonal demand up to 5 months in advance while providing ideas on how to trade these forward expectations. 

With weather in control we continue to have a strong grasp on the natural gas market. This morning we warned that a small pullback in prices towards support was possible, but any pullback was a buying opportunity. 

In our Note of the Day (images omitted) sent out just before 11 AM EST today we similarly predicted the rally late this morning and into the early afternoon, warning clients in advance that a short-term spike in natural gas prices was likely off American guidance that would be coming out shortly. 

From the point of this release to the peak just before 12:30 PM EST we recorded around a 7-cent rally in natural gas prices off of long-range bullish risk on the GFS and GEFS, flipping the front of the natural gas strip green.