The November natural gas contract continued its rip higher, tacking on another 2% to its recent rally today. 

As has been the trend the last couple of days as well, gains were largest at the front of the strip. 

The result is that the November/March X/H spread is still significantly blowing out. 

Pipeline constraints have caused physical gas prices across the Gulf Coast to spike recently, with the rally in Henry Hub cash prices helping drag up the prompt month gas contract as well. 

The December contract has generally kept pace through the rally, though. 

Our Morning Update warned clients that along with these constraints, “…in-week burns have not loosened yet even with this recent rally, and this could help keep cash stronger today with elevated GWDDs into the end of the week.” Accordingly, we saw any bounce as not being weather-driven as weather forecasts barely changed overnight. 

Traders are now turning their attention to tomorrow’s EIA storage announcement, where they are expected to announce that far more gas was injected into storage the past week over the week prior. In our Afternoon Update we broke down our expectations for the print and how prices could move into it, as well as what it indicated about the current supply/demand balance in the gas market and what has seemed to be driving the gas market the most recently.