Today’s December natural gas contract trading range eclipsed that of yesterday as prices continued to whipsaw around. Prices initially were strong before selling off through the day and spiking right into the settle to close only a few percent below yesterday’s settle. 

The January contract led the way lower today, with strong physical prices helping the December contract minimize gains relative to later contracts. The April contract also got into much of the selling after it got in on the buying action yesterday. 

Today was rather surprising for us, as in our Morning Update when prices were just below $4.5 we highlighted that, “if anything we still see risk a bit higher, though prices likely stay from $4.4-$4.7” thanks to “…significant long range cold risks…” 

Initially our prediction worked very well, as the December natural gas contract shot up to $4.67 this morning, though prices began selling off on some cash weakness after. However, this selling intensified through the afternoon, with $4.4 being surprisingly broken later in the day even as afternoon GEFS guidance did not seem much warmer (image courtesy of Tropical Tidbits). 

In our Note of the Day for subscribers we outlined that the strip was showing some bearish signals, and crude prices were hit very hard today, so it did not appear weather was the reason for the move lower. Sure enough, then, prices spiked very significantly into the settle to move right back into the middle of the $4.4-$4.7 range we had expected for the day, verifying our market view. This came as European model guidance confirmed long-range cold, with more cold in the medium-range too per the Climate Prediction Center. 

Today for subscribers we also released our Seasonal Trader Report, where we look at our 5-month GWDD forecast and specifically looked at when long-range cold risks in December could break down. We also had our weekly subscriber live chat, where we looked at the latest weather pattern dynamics, risks to natural gas prices, and fielded questions from subscribers. We covered quite a bit, but one focus was the longevity of the upcoming -NAO regime.