NYMEX Natural Gas Futures Contract Natural gas prices saw a slight reversal today as all contracts settled in the green. The prompt month February NYMEX futures contract settled up US$0.184/MMBtu at $4.172.

Fundamentals Not much has changed day-over-day but some headlines overseas have been affecting prices domestically. European price caps have finally yielded some results as a price cap of of approximately $50/MMBtu is to start taking affect February 15th of this year. Looking ahead though, the ICE Exchange has placed a warning as having a cap to cushion prices could actually lead to the opposite effect. Liquidity providers in the market would be incentivized to buy back their short positions and stop selling if prices climbed relatively near the cap to cover themselves against the risk of holding these position when the cap is triggered. At that point, there would be heavy uncertainty in terms of what they’re trading and their risk levels. Domestically, the eye is once again on storage levels. Tomorrow’s withdrawal is expected to increase the deficit to last year given the winter storm and cold weather. ~CL

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