Volatility continues in the natural gas market with prices bouncing all around within a rather narrow range through the day today. Prices initially saw strength again from strong physical prices, then quickly sold off but reversed on a bearish EIA print before declining post-settle on some bearish weather model guidance. 

Again gains were most significant at the front of the futures strip today. 

The result is that the X/Z November/December contract spread is set to expire at its highest level of the past several years. 

Some of this is thanks to the strong physical prices we have been mentioning. 

These physical prices have stayed strong thanks to storage levels that are very low, resulting in a need to force additional gas into storage. That was seen today in what was a very loose weather-adjusted storage print, where the EIA announced that 63 bcf of gas was injected into storage (though 5 bcf of gas was revised out of the South Central, yielding a net change of 58 bcf week-over-week). 

Prices sold off initially on this EIA announcement though quickly reversed and spiked up to the highs on the day. Afternoon model guidance then trended back warmer in the East, however, helping pull prices lower since then. 

This was not particularly surprising as in our Morning Update we indicated only modest GWDD losses overnight but saw increasing bearish risks with 12z weather model guidance.