How natural gas prices traded today depends significantly upon where you look along the strip. If your focus remains on the prompt month February contract which hits options expiry tomorrow, prices pulled back decently today. 

If you focus further along the natural gas strip, though, price action was more bullish, with the March natural gas contract rallying decently for most of the day before pulling back into the settle. 

Price action today played out exactly as we warned subscribers it was like to yesterday, as we saw risks that warmer trends in early February could pull the February contract back from its recent run, but saw that the March natural gas contract would still find support from cold risks. 

The warm risks we have seen through the end of January were something we were warning our clients about in our Weekly Natural Gas Report 10 days ago, where we also mentioned the risk that mid-February sizable cold risks should arrive (like what we have seen recently on modeling guidance). 

In terms of flat price, however, the impacts of this warm final third of January have been muted by the return of cold risks moving into February. That combined with dwindling stockpiles to spike the February/March G/H spread, which pulled back today. Yet it is the fact that H did not participate as much in this February contract rally that indicates the market was not as concerned about stockpiles to end the season as it may have appeared when looking at prompt month price, thanks in part to the short-term warmth we are seeing to end January that has allowed us to keep more gas in storage (and in some cases inject gas back into storage). 

Of course, the dwindling stockpile narrative was only furthered by a very bullish EIA print today. And this is not to say that the market is not concerned about storage levels, as it is clear that elevated prices at the front of the strip are ensuring we price out enough demand to make it through the winter with decent stockpiles.