After solid declines along the natural gas strip yesterday, March contract prices recovered a bit today, settling up about half a percent on a much slower trading day. 

For the first time in quite awhile, all the gains came for the prompt month March natural gas contract, with the rest of the strip falling off a bit. 

The result was the March/April H/J spread seeing the first day of gains in February. 

Generally this week natural gas prices have fit with expectations. Yesterday we warned clients of potential downside towards $2.75 support on any warmer trends, which arrived on model guidance. Then today we saw prices likely to take a break with our neutral sentiment. 

Warmer trends on afternoon guidance as well had the Climate Prediction Center favoring more warmth across the East through Week 2. 

Yet despite this natural gas prices actually held rather firm through the day and traded in a relatively tight range, something we highlighted to clients was likely in our Note of the Day later this morning. 

It is clear that after pricing out much of the winter premium, volatility is falling back in the market, with the average prompt month trading range falling back significantly (especially today with only a 9-cent range). 

Still, it is clear that winter is not over, and significant shifts to heating demand expectations over the coming month could have sizable impacts on how much gas we walk out of withdrawal season with. We expect weather to continue playing a sizable role in natural gas price action over the coming weeks, and have outlined how we see weather models likely to trend to clients and how that should drive natural gas prices as well over the coming week.